NLC India Limited

Utilities — Utilities - Regulated Electric · NSE

₹252.05+₹0.75 (+0.30%)

DalalBaazaar Score

64 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by moderate debt load, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of NLC India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

NLC India Limited engages in the mining and power generation business in India. It operates through three segments: Mining, PowerThermal, and Power Renewab.

IndustryUtilities - Regulated Electric

SectorUtilities

Annual revenue₹17,489 Cr

How does it make money?

Turns over ₹17,489 Cr a year. Of every ₹100 of sales, about ₹20 reaches shareholders as profit, with ₹42 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are NTPC LTD, POWER GRID CORP. LTD., TATA POWER CO LTD, ADANI POWER LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 9.3% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE15.8%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 7.5% and earnings to grow about 13.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+7.5%

Est. earnings growth+13.4%

Analysts1

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +8% while net margin moved +133% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+8%

Margin effect+133%

DalalBaazaar Score

64/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Debt/Equity of 1.10x is on the heavy side
✗ Current ratio of 0.80 — short-term liabilities exceed short-term assets
✗ Free cash flow is negative — growth is being funded by borrowing or fresh equity
• Interest cover of 4.2x is adequate

Quality vs. Valuation

Company Quality

62/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

81/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

10.7x

3Y Median

17.0x

40 monthly readings · mean 17.1x · range 9.9x–28.0x

Sector Median

20.6x

median of 4 sector peers

🟢Current valuation is approximately 37% below its 3y median of 17.0x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 48% below the peer median of 20.6x.

vs. its own history

Cheap

17.0x median over 40 months · -37%

vs. sector peers

Cheap

20.6x median of 4 peers · -48%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.4x

PEG

0.30

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 36.5% to 42.2% over 3 years.
Return on equity is rising
ROE has improved from 9.2% to 16.4%.
Return on capital is rising
ROCE has improved from 6.3% to 9.3%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Inventory building faster than salesFinancial
Inventory up 93% against revenue up 8% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹2,779 Cr in the latest year.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.80 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 36.5% to 42.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 37% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 48% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.8x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Growth barely outpaces inflation
Revenue compounding at 2.7% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 40%✓ 42.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.8x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹2,779 Cr
Profit that never becomes cash eventually stops being profit.
4Revenue growth stays above 4% a year✗ 2.7% CAGR
Latest reported year was 23.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5ROCE stays above 8%✓ 9.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 5 neutral · 2 weak

Market Cap

₹34,950 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

10.7x

Cheap

Cheap against the generic band

P/B Ratio

1.62x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹23.58

Profitable

Profitable on a per-share basis

ROE

16.4%

Strong

Strong capital efficiency

ROCE

9.3%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.10x

Moderate

Moderate leverage

Revenue Growth (YoY)

23.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-42.3%

Falling

Profits are shrinking

Dividend Yield

1.53%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹2,779 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

9.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

17.1%

Good

Healthy core-business profitability

Net Margin

17.5%

Good

Strong bottom-line conversion

Current Ratio

0.80

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.54

Defensive

Steadier than the market

52W Range Position

14%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

255.9 / 266.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

42.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹16,165 Cr	₹13,001 Cr	₹15,283 Cr	₹17,489 Cr	+2.7%
EBITDA	₹5,895 Cr	₹5,516 Cr	₹6,605 Cr	₹7,383 Cr	+7.8%
EBITDA Margin	36.5%	42.4%	43.2%	42.2%	—
PAT (Net Profit)	₹1,396 Cr	₹1,854 Cr	₹2,621 Cr	₹3,522 Cr	+36.1%
EPS	₹10.28	₹13.37	₹18.9	₹25.4	+35.2%
ROE	9.2%	11.2%	14.0%	16.4%	—
ROCE	6.3%	7.8%	9.7%	9.3%	—
Total Debt	₹22,333 Cr	₹22,415 Cr	₹22,429 Cr	₹27,892 Cr	+7.7%
Free Cash Flow	₹1,568 Cr	₹2,344 Cr	₹1,637 Cr	-₹2,779 Cr	—

🟢 Revenue has grown at 2.7% a year over 3 years.

🟢 EBITDA has grown at 7.8% a year over 3 years.

🟢 EBITDA Margin has risen from 36.5% to 42.2% over 3 years (+5.8 pts).

🟢 PAT (Net Profit) has grown at 36.1% a year over 3 years.

🟢 EPS has grown at 35.2% a year over 3 years.

🟢 ROE has risen from 9.2% to 16.4% over 3 years (+7.2 pts).

🟢 ROCE has risen from 6.3% to 9.3% over 3 years (+3.0 pts).

🔴 Total Debt has grown at 7.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1,568 Cr to -₹2,779 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹65,202 Cr

Total Liabilities

₹39,928 Cr

Cash & Equivalents

₹711 Cr

Operating Cash Flow

₹5,166 Cr

Capex

-₹7,945 Cr

Shareholding (proxy)

Institutional Holding

14.7%

Insider Holding

72.5%

Corporate Actions

Dividend Rate

₹3.85

Ex-Dividend Date

22 Sept 2026

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹351

+39.3% vs CMP

Target Range

₹351 – ₹351

Peer Comparison

Company	P/E	ROE
NTPC LTD	11.0x	13.7%
POWER GRID CORP. LTD.	14.6x	15.8%
TATA POWER CO LTD	29.3x	9.8%
ADANI POWER LTD	26.5x	21.9%

Recent News

3 mixed3 general

NLC India Raises Rs 500 Crore Through Commercial Papers

HDFC Sky, 23 Sept

NLC India shares decline 5.68% to Rs 287.10

Moneycontrol.com, 10 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

NLC India shares decline 2.04%, trading at Rs 271.00

TradingView, 19 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Stocks to watch: NLC India, Medanta, KPI Green Energy, Coal India & more

Business Standard, 30 Sept

Government 3% share sale in NLC India opens for subscription

The Hindu, 09 Jun

NLC India shares fall 3% as OFS worth up to Rs 1,263 crore opens

The Economic Times, 09 JunPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability · Valuation

MiddlingRisk

WeakFinancial Health

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Revenue growth stays above 4% a year · see Key things to watch ↑