NLCINDIA - Investment Analysis

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

Investment Rating: 4.3

⚙️ Fundamental Analysis: NLC India Ltd.

NLC India, a government-owned mining and power generation company, presents a compelling value proposition with strong earnings, low valuation, and improving profitability. While capital efficiency is moderate, its PEG ratio and EPS growth make it attractive for long-term investors seeking value in the energy sector.

Metric Value Implication

Stock P/E 12.7 Deeply undervalued vs. industry PE of 41.2 — strong value signal

PEG Ratio 0.25 Very attractive — growth is significantly underpriced

ROE / ROCE 14.9% / 10.8% Decent — ROE is solid, ROCE could improve

Dividend Yield 1.25% Moderate — adds passive income

Debt-to-Equity 1.20 High — typical for capital-intensive sectors, but worth monitoring

EPS ₹18.9 Strong — supports valuation and growth narrative

Profit Growth (QoQ) +311% Exceptional — likely driven by one-offs or seasonal factors

📉 Technical & Trend Analysis

Current Price: ₹239

DMA 50 / DMA 200: ₹233 / ₹235 — trading slightly above both, indicating strength

RSI: 55.9 — neutral to mildly bullish

MACD: +2.53 — bullish crossover

Volume: Below average — low momentum, potential accumulation

✅ Is It a Good Long-Term Investment?

Yes — strong candidate for long-term value investing. NLC India offers a rare mix of low valuation (P/E and PEG), strong earnings, and decent ROE. While debt levels are high, they’re typical for the sector and manageable given its PSU backing.

🎯 Ideal Entry Price Zone

Buy Zone: ₹220–₹235

Near DMA support and below recent highs

Accumulate gradually if PEG stays below 0.5 and ROE remains above 14%

Avoid chasing above ₹260 unless volume and earnings momentum pick up

🧭 Exit Strategy / Holding Period (If Already Holding)

If you're already invested

Holding Period: 2–4 years — to benefit from valuation rerating and sector tailwinds

Exit Strategy

Partial Exit near ₹295–₹305 if P/E exceeds 20 and PEG rises above 1

Hold if PAT growth sustains and dividend payout improves

Reassess if debt-to-equity rises further or ROCE stagnates below 10%

Would you like a comparison with other PSU energy plays like SJVN, NTPC, or Coal India to explore broader opportunities in the power and mining space?

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