NLC India Shares Surge 12% as Q3FY25 Revenue Jumps 39%, EBITDA Doubles

NLC India witnessed a 12% surge in its share price, reaching Rs 236.80 per share on the BSE during Tuesday’s intraday trade.

This sharp rise followed the company’s robust Q3FY25 earnings report, which showcased a 39% year-on-year (YoY) growth in consolidated revenue. Revenue for the quarter stood at Rs 4,411 crore, compared to Rs 3,164 crore in Q3FY24.

The company’s EBITDA more than doubled, recording a 101% increase to Rs 1,827 crore from Rs 905 crore in the corresponding quarter last year.

The EBITDA margin also expanded significantly to 41.4% in Q3FY25 from 28.6% in Q3FY24. Additionally, NLC India’s net profit experienced an impressive 167.2% YoY surge, reaching Rs 668 crore compared to Rs 250 crore in Q3FY24.

Dividend Announcement and Investment Plan

NLC India has declared a dividend of Rs 1.5 per share (face value Rs 10 each) for FY25. The record date for the dividend is February 7, with the payment scheduled by March 4.

Furthermore, the board has sanctioned an investment of Rs 1,110 crore in a joint venture with Rajasthan Rajya Vidyut Utpadan Nigam Ltd. This investment is aimed at developing lignite-based thermal power plants and lignite mines in Rajasthan.

Production and Power Generation Growth

For the nine months ending FY25, NLC India reported lignite production of 171.35 lakh tonnes (LT), reflecting a 5.23% increase from 162.83 LT in the same period last year.

Additionally, the company achieved its highest-ever coal production of 115.16 LT, a 40.11% growth compared to 82.19 LT in the previous year.

The company’s gross power generation increased to 20,568 million units (MU), marking a 4.71% rise from 19,643 MU recorded in the corresponding period of FY24.

Market Trends and Stock Performance

Despite the recent surge in stock price, NLC India’s shares have declined by 15% over the past six months and by 11% over the past year. In comparison, the BSE Sensex has dropped 4% in the last six months but has gained 8% over the past year.

As of 10:26 AM on Tuesday, NLC India’s stock was trading at Rs 234.95 per share on the BSE, marking an 11.22% increase. Meanwhile, the BSE Sensex was up by 0.69%, reaching 77,722.31.

Financial Metrics and Valuation

NLC India’s total market capitalization stands at Rs 32,759.29 crore. The stock is currently trading at a price-to-earnings (P/E) multiple of 23.82, with an earnings per share (EPS) of Rs 8.87, as per BSE data.

Sector Performance and Competitor Analysis

The BSE POWER index was at 6,204.5, reflecting a 0.6% increase. The top gainers in the index included BHEL (up 4.8%) and ABB (up 3.8%), while KEC International (down 3.2%) and Torrent Power (down 1.4%) were among the top losers.

Over the past year, NLC India’s stock has declined from Rs 260.2 to Rs 235.7, registering a 9.4% loss. In contrast, the BSE POWER index has fallen by 2.4% over the same period.

Among its peers, Adani Green Energy, Adani Energy Solutions, and NHPC recorded declines of 41.3%, 30.6%, and 15.7%, respectively.

Financial Breakdown for Q3FY25

NLC India’s net profit surged 173.9% YoY to Rs 6,960 million in Q3FY25, compared to Rs 2,541 million in the same period last year. Net sales also saw a substantial rise of 39.4%, reaching Rs 44,114 million from Rs 31,644 million in Q3FY24.

For the fiscal year ending March 2024, NLC India reported a 31% increase in net profit to Rs 18,673 million, compared to Rs 14,251 million in FY23. However, revenue declined by 19.6%, standing at Rs 129,990 million for FY24.

The company’s price-to-earnings ratio (P/E) based on rolling 12-month earnings is currently at 13.9.

Segment-wise Revenue Performance

• Mining Segment: Revenue increased by 5.48%, reaching Rs 2,021.59 crore in Q3FY25 from Rs 1,916.61 crore in Q3FY24.
• Power Generation Segment: Revenue surged 39.73% to Rs 3,668.80 crore in Q3FY25 from Rs 2,625.56 crore in the corresponding quarter last year.

Government Ownership and Future Outlook

NLC India is a ‘Navratna’ Public Sector Undertaking (PSU) engaged in coal and lignite mining and thermal power generation. As of December 31, 2024, the Government of India holds a 72.20% stake in the company.

With record-high profit after tax (PAT) of Rs 2,245 crore, reflecting a 28% YoY growth, and total income reaching Rs 12,909 crore (a 30% increase), NLC India continues to strengthen its financial performance.

Brokerage Recommendation

Brokerage firm Axis Securities has maintained a ‘Buy’ rating on NLC India stock, projecting a 45% upside potential with a target price of Rs 305 per share.

According to the brokerage, “We roll forward our valuation to FY27 from FY26. Our valuation includes conventional thermal business at 1.3x on consolidated regulated equity projections, regulated mining business at 1.9x FY27 regulated equity, renewable energy (RE) business at EV/EBITDA of 7.6x FY27 EBITDA, and merchant coal business at 6.0x EV/EBITDA on FY27 EBITDA. This results in a target price of Rs 305 per share, implying a 45% upside from the current market price.”