NLCINDIA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.3
| Stock Code | NLCINDIA | Market Cap | 43,901 Cr. | Current Price | 317 ₹ | High / Low | 329 ₹ |
| Stock P/E | 22.6 | Book Value | 131 ₹ | Dividend Yield | 1.14 % | ROCE | 9.02 % |
| ROE | 5.61 % | Face Value | 10.0 ₹ | DMA 50 | 278 ₹ | DMA 200 | 259 ₹ |
| Chg in FII Hold | 0.39 % | Chg in DII Hold | 0.26 % | PAT Qtr | 428 Cr. | PAT Prev Qtr | 485 Cr. |
| RSI | 71.8 | MACD | 13.4 | Volume | 56,11,583 | Avg Vol 1Wk | 92,36,531 |
| Low price | 213 ₹ | High price | 329 ₹ | PEG Ratio | 73.1 | Debt to equity | 0.47 |
| 52w Index | 89.6 % | Qtr Profit Var | 4.78 % | EPS | 14.0 ₹ | Industry PE | 31.0 |
📊 Financials: NLCINDIA shows weak efficiency with ROE at 5.61% and ROCE at 9.02%. EPS is modest at ₹14.0, and quarterly PAT declined (₹428 Cr vs ₹485 Cr), reflecting earnings pressure. Debt-to-equity stands at 0.47, manageable but not negligible. Dividend yield of 1.14% provides limited income support.
💹 Valuation: The stock trades at a P/E of 22.6, below the industry average of 31.0, suggesting fair valuation. However, PEG ratio of 73.1 highlights poor growth prospects relative to valuation. Book value of ₹131 provides a reasonable intrinsic base, but overall growth metrics remain unattractive.
🏭 Business Model: NLCINDIA operates in power generation and mining, with strengths in lignite-based energy production. Its competitive advantage lies in government backing and resource ownership. However, weak profitability, high PEG ratio, and sector cyclicality limit long-term appeal.
📈 Entry Zone: Attractive entry would be near ₹290–₹300, aligning with support levels and fairer valuation. Current price (₹317) is above both 50 DMA (₹278) and 200 DMA (₹259), suggesting bullish momentum but overbought conditions (RSI 71.8). Long-term investors should wait for dips before accumulation.
Positive
- Fair valuation with P/E below industry average.
- Dividend yield of 1.14% provides steady income.
- Government backing ensures operational stability.
- Institutional inflows with FII (+0.39%) and DII (+0.26%).
Limitation
- Weak ROE (5.61%) and ROCE (9.02%).
- High PEG ratio (73.1) signals poor growth prospects.
- Quarterly PAT declined (₹428 Cr vs ₹485 Cr).
- Overbought RSI (71.8) limits near-term upside.
Company Negative News
- Decline in quarterly profits.
- Weak growth outlook reflected in high PEG ratio.
Company Positive News
- Institutional support with FII and DII inflows.
- Dividend yield provides income stability.
- Government backing strengthens long-term operations.
Industry
- Power generation sector remains capital-intensive and cyclical.
- Industry P/E at 31.0 highlights NLCINDIA’s fair valuation.
- Regulatory and environmental factors impact profitability.
Conclusion
⚖️ NLCINDIA demonstrates fair valuation but suffers from weak efficiency, poor growth metrics, and earnings decline. Entry is favorable near ₹290–₹300 for cautious investors. Current levels suggest overbought conditions, making accumulation risky. Long-term holding is viable only with close monitoring of profitability and growth outlook.