PSU stock NLC India rallies 12% on robust Q3 earnings; Should you buy or sell?
NLC India reported highest ever profit after tax of ₹2,245 crore, reflecting a 28 per cent year-on-year growth, against ₹1,754 crore in the same period of the previous fiscal year.
Public Sector Unit (PSU) stock NLC India stock rallied over 12 per cent on Tuesday after the company reported robust earnings for the quarter ending on December 31, 2024.
NLC India reported highest ever profit after tax of ₹2,245 crore, reflecting a 28 per cent year-on-year growth, against ₹1,754 crore in the same period of the previous fiscal year.
NLC India's board has declared an interim dividend of ₹1.50 per share for eligible shareholders. The record date for determining eligibility is set for February 7, and the dividend will be distributed to entitled shareholders by March 4.
The company recorded its highest-ever operational revenue at ₹11,445 crore, marking a significant 21 per cent year-on-year growth from ₹9,458 crore in the same period last year.
Similarly, NLC India’s total income surged to a record ₹12,909 crore, reflecting a 30 per cent increase from ₹9,912 crore in the corresponding period of the previous year.
For the nine months ending December 2024, NLC India reported a lignite production of 171.35 LT, reflecting a 5.23 per cent rise from 162.83 LT in the previous year. Coal production reached an all-time high of 115.16 LT, marking a 40.11% surge from 82.19 LT last year.
Gross power generation stood at 20,568 MU, up 4.71 per cent from 19,643 MU in the prior year, including 1,579 MU from renewable sources. All these figures represented record highs for the period.
NLC India stock performance
NLC India’s share price has declined by 15 per cent over the past six months and 11 per cent over the last year. In contrast, the BSE Sensex has dropped 4 per cent in the last six months but gained 8 per cent over the past year.
NLC India has a total market capitalization of ₹32,759.29 crore. As per BSE data, its shares are trading at a price-to-earnings ratio of 23.82, with an earnings per share of ₹8.87.
NLC India, a state-owned enterprise, is engaged in coal and lignite mining as well as power generation.
Buy or sell?
Brokerage firm Axis Securities has maintained ‘buy’ rating on NLC India stock, sees an upside potential up to 45 per cent with a target price of ₹305 per share.
“We roll forward our valuation to FY27 from FY26. We value the conventional thermal business at 1.3x (unchanged) on our consolidated regulated equity projections of FY33 discounted to FY26; Regulated Mining business at 1.9x FY27 regulated equity (from FY26); RE business at EV/EBITDA of 7.6x on FY27 EBITDA (from 9.0x FY26 EBITDA), and the merchant coal business at 6.0x EV/EBITDA on FY27 EBITDA (from 7.0x FY26 EBITDA). This results in a sum-of-the-parts (SOTP) target price of ₹305/share (unchanged). Our target price implies an upside of 45% from the current market price (CMP),” the brokerage firm said in a report.
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