PSU Power Stock in Focus: NLC India Plans Over 600% Capacity Expansion by 2030
PSU Power Stock : NLC India Ltd, a leading public sector undertaking (PSU) in the energy sector, has unveiled an ambitious plan to increase its renewable energy capacity by more than 600% by 2030. The company aims to scale its current renewable portfolio from 1.4 GW to 10 GW, reinforcing its position in India’s clean energy transition. With a robust expansion strategy, significant fundraising, and upcoming IPO plans, NLC India is poised for a transformational decade in the power sector.
Massive Capacity Expansion on the Horizon
NLC India Ltd is aggressively expanding its energy footprint, particularly in the renewable sector. The company plans to develop large-scale solar and wind projects across multiple states, significantly boosting its installed capacity.
Currently, NLC India’s renewable energy portfolio consists of 50 MW of wind power and the rest from solar projects, primarily concentrated in Tamil Nadu. However, with several large-scale projects in the pipeline, the company is well on its way to achieving its 10 GW target by 2030.
Some of the key projects driving this expansion include:
- 300 MW solar project in Barsingsar, Rajasthan
- 600 MW installation at Khavda Solar Park
- 800 MW additional capacity in Rajasthan
- A joint venture with the Rajasthan government to develop 2 GW of renewable energy
Additionally, NLC India is diversifying into thermal power projects, with ongoing developments in Ghatampur and Talabira. The company has also formed a joint venture in Assam, where it holds a 51% stake, while Assam Power Distribution Company Ltd (APDCL) holds 49%, to develop a 1,000 MW solar power project.
Major Fundraising Plans to Fuel Expansion
To support its aggressive expansion, NLC India Ltd has approved a Rs.5,000 crore (USD 600 million) fundraising plan through External Commercial Borrowings (ECB). This strategic move will provide the necessary financial backing for its upcoming renewable projects.
Additionally, the company is seeking financial support from Multilateral Development Banks (MDBs) through the Department of Economic Affairs (DEA). These funding initiatives will help NLC India accelerate its renewable capacity expansion while optimizing its capital structure.
Renewable Energy Subsidiary IPO in FY26
To further its clean energy ambitions, NLC India has established subsidiaries like NIRL and NIGEL, focusing on renewable energy projects. The company has announced plans for an Initial Public Offering (IPO) of NIRL in the latter half of FY26, allowing investors to directly participate in its renewable energy growth story.
The company has earmarked ₹50,000 crore in investments to scale its renewable energy business, with a vision to become a 20 GW energy giant by 2030, where over 50% of the capacity will come from renewables.
Stock Performance and Market Reaction
The market has responded positively to NLC India’s expansion plans. On Tuesday, the stock surged to an intra-day high of ₹227.80 per share, reflecting a 9.41% increase from its previous close of ₹208.20. The stock later settled at ₹226.51 per share.
Over the last five years, NLC India’s stock has delivered a massive 330% return, making it one of the top-performing PSU power stocks.
Financial Performance: Strong Revenue Growth
NLC India Ltd has reported impressive financial growth, driven by its expanding energy portfolio.
| Financial Metrics | Q3 FY25 | Q3 FY24 | QoQ Growth |
|---|---|---|---|
| Revenue (₹ Cr.) | 4,411 | 3,164 | +39.4% |
| Profit After Tax (₹ Cr.) | 696 | 254 | +174% |
| Sequential PAT Growth | 982 (Q2 FY25) | 696 (Q3 FY25) | -29% |
Despite a 29% sequential decline in PAT, the company has demonstrated significant year-on-year profit growth, highlighting its strong fundamentals.
Key Financial Ratios & Market Valuation
| Metric | Value |
|---|---|
| Market Capitalization | ₹32,170 Cr. |
| Current Price | ₹232 |
| 52-Week High/Low | ₹312 / ₹186 |
| Stock P/E | 14.3 |
| Book Value | ₹128 |
| Dividend Yield | 1.24% |
| Return on Capital Employed (ROCE) | 6.54% |
| Return on Equity (ROE) | 6.79% |
| Debt-to-Equity Ratio | 1.27 |
| Pledged Percentage | 0.00% |
| Quarterly Profit Variation | +167% |
| Industry P/E | 27.5 |
| Graham Number | ₹216 |
| Intrinsic Value | ₹136 |
| Relative Strength Index (RSI) | 55.0 |
| EPS | ₹16.2 |
| PEG Ratio | -2.14 |
| 200-Day Moving Average (DMA) | ₹238 |
| Free Cash Flow (Last 3 Years) | ₹10,826 Cr. |
| Free Cash Flow (Current Year) | ₹2,376 Cr. |
With a stock P/E of 14.3, which is significantly lower than the industry P/E of 27.5, NLC India remains an attractive stock for investors looking for long-term value in the power sector.
Final Thoughts: A Bright Future Ahead
NLC India Ltd’s ambitious expansion into renewable energy, backed by strong financial performance and strategic fundraising, positions it as a key player in India’s clean energy transition. The upcoming IPO of its renewable energy subsidiary in FY26 further enhances its growth potential.
With massive capacity expansion, a strong financial outlook, and growing investor interest, NLC India is a PSU power stock to watch out for in the coming years.
Would you consider investing in NLC India given its massive growth plans? Share your thoughts in the comments
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.