NLCINDIA - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.9

Here’s a full-spectrum breakdown of NLC India Ltd. — a government-backed mining and power-generation major, combining legacy stability with pockets of underappreciated value.

🔍 Core Financials Insight

Profitability

ROCE: 10.8% and ROE: 14.9% — moderate, but consistent with capital-intensive utilities.

EPS: ₹18.9 — solid earnings against the current price; helps anchor valuation.

Quarterly PAT

₹468 Cr. vs ₹668 Cr. prior — decline indicates seasonal or one-off influences, though YoY Profit Var of 311% is highly impressive.

Debt Position

Debt-to-equity at 1.20 — typical for infra players with long-term asset cycles, but warrants close monitoring.

Dividend Yield

1.25% — modest, yet reliable as part of PSU dividend policy.

📊 Valuation Dashboard

Metric Value Remarks

P/E Ratio 12.7 Deeply undervalued compared to Industry PE (41.2)

P/B Ratio ~1.77 Attractive relative to Book Value ₹135

PEG Ratio 0.25 Suggests undervaluation vs earnings growth

Intrinsic Value ✖ Likely above current market price, suggesting potential re-rating

Conclusion: Strong value indicators make it a compelling candidate for accumulation.

⚡ Business Model & Strategic Edge

Diversified across lignite mining, thermal power, and renewable energy, offering a hedge against commodity cycles.

Backed by Government of India, providing sovereign assurance and stable tender pipelines.

Ongoing expansion into solar and wind projects offers future growth visibility.

Challenges include environmental compliance, project execution delays, and cyclical demand.

📉 Technical Trends

RSI at 55.9 — neutral-to-strong; hovering just below overbought.

MACD at 2.53 — positive divergence, confirms bullish undertone.

Price trading slightly above 50-DMA (₹233) and 200-DMA (₹235) — momentum intact.

Volume trailing below average — may indicate silent accumulation or mild investor fatigue.

🎯 Entry Zone & Long-Term Perspective

Entry Range: ₹225–₹235 — ideal for accumulation around DMA levels.

Holding Strategy

Great fit for dividend-oriented portfolios, infrastructure exposure, and defensive positioning.

Recommend staggered entry, with upside potential riding on power sector reforms, CapEx cycles, and renewable triggers.

Want me to put NLC India head-to-head with NTPC or Coal India? I can build a contrast matrix across ROE, asset mix, debt profile and dividend yield to see who stands tallest. Say the word and I’ll whip it up.

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