NYKAA Cup and hndle pattern Breakout Chart

                   NLCIndia ALl Time high and cup& Handle pattern 

                          breakout on Weekly & monthly Time frame

Technical Analysis

• Market Cap                      ₹ 39,408 Cr.
• Current Price                    ₹ 284
• High / Low                       ₹ 312 / 115
• Stock P/E                            21.2
• Book Value                      ₹ 119
• Dividend Yield                   1.23 %
• ROCE                                 9.13 %
• ROE                                    11.7 %
• Face Value                      ₹ 10.0
• Industry PE                         38.4
• Promoter holding               72.2 %
• Pledged percentage            0.00 %
• Debt to equity                     1.36
• Profit Prev 12M                 ₹ 2,590 Cr.
• EP                                    ₹ 13.4
• Price to book value            2.38
• EVEBITDA                           11.0
• Price to Earning                  21.2
• No. Eq. Shares                    139 Cr.
• Change in Prom Hold         0.00 %

1. Company Overview

NLC India Limited, formerly Neyveli Lignite Corporation, is a government-owned enterprise under the Ministry of Coal. The company’s core operations include lignite mining, thermal power generation, and renewable energy production. Established in 1956, NLC India has grown to become a significant player in India's energy sector, with a strong presence in both conventional and renewable energy segments.

2. Revenue and Profitability 

NLC India’s revenue is primarily driven by its power generation business, which accounts for the majority of its income. The company has long-term Power Purchase Agreements (PPAs) with state electricity boards, ensuring a steady stream of revenue. In the fiscal year 2023-24, NLC India reported revenues of approximately INR 11,000 crore, demonstrating consistent growth. However, profitability has been somewhat constrained by high operating costs, particularly due to the capital-intensive nature of its projects. The company's EBITDA margin typically ranges between 30-35%, but net profit margins are lower, influenced by depreciation and interest expenses.

3. Debt and Financing

NLC India’s expansion into coal mining and renewable energy has led to an increase in its debt levels. As of the latest reports, the company's debt-to-equity ratio stands around 1.2, indicating a moderate level of leverage. While the company benefits from favorable borrowing terms due to its government backing, the rising debt poses a potential risk, particularly in a high-interest rate environment. The company’s ability to generate consistent cash flows from its power generation operations is crucial in managing its debt obligations.

4. Dividend Policy 

NLC India is known for its consistent dividend payments, making it attractive to income-focused investors. The company typically maintains a dividend payout ratio of around 40-50%, reflecting a balanced approach to rewarding shareholders while retaining earnings for future investments. This policy underscores the company’s commitment to delivering value to its shareholders while ensuring financial stability.

5. Growth Prospects

NLC India’s future growth is closely linked to its investments in coal mining and renewable energy. The operationalization of its coal blocks in Odisha and its expanding renewable energy portfolio position the company well to capitalize on India’s growing energy demands. However, the company faces challenges such as regulatory hurdles, competition in the renewable sector, and project execution risks.

 

Pros

• Company has been maintaining a healthy dividend payout of 25.4%
• DII increases Holding March-2023 to Jun-2024 year on year 6.89% to 13.82%.
• FII increase holding March-2023 to June -2024 year on year 0.67% to 2.18%.

Cons

• The company has delivered a poor sales growth of 5.66% over past five years.
• Company has a low return on equity of 11.0% over last 3 years.
• Company might be capitalizing the interest cost
• Earnings include an other income of Rs.2,020 Cr.

Promoter holding has decreased over last 3 years: -7.00%