Agricultre7 min ago
Navratna PSU stock remains analysts' long-term favourite; brokerage's Rs 303 target implies 17% upside
- Written by ZeeBiz WebTeam
Published: Zee Business| Updated: Zee Business
Multibagger PSU Stock to Buy: PSU stocks have been a favoured space on Dalal Street in 2024 so far thanks to the government's heavy capital expenditure (capex) commitment as part of its New India vision for the country. Many PSU shares have showered investors with phenomenal returns as reflected in Nifty PSU's almost 78 per cent rally, sharply higher than a 26 per cent surge in the headline Nifty50 index. One such stock is NLC India (NLCINDIA), which has already rule the roost within the space with a return of 96 per cent in 12 months. Many analysts remain positive on the growth prospects of NLC India, a Navratna PSU under the Ministry of Coal, due to its ambitious capacity expansion drive and focus on renewable energy.
NLC India deals in a range of areas including coal mining, power generation, power trading, and consultancy. It is also the designated nodal agency for lignite mining in the country.
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Navratna PSU Stock in the Spotlight: NLCINDIA
1/10Many analysts hold positive views on the Navratna PSU, betting big on its capacity addition, which is expected to drive future growth for the company.
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Axis Securities has 'buy' call on NLC India
2/10Axis Securities, which started coverage on the stock in July, has 'buy' call on NLC India with a target price of Rs 303 from a perspective of 6-9 months.
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Navratna PSU stock NLC India is Axis Securities' pick of the week
3/10The brokerage's target price of Rs 303 for NLC India shares implies a potential upside of 16.9 per cent from the lowest level of the day on October 7.
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Should you buy, sell or hold NLC India shares? Here's how analysts view the Navratna PSU stock
4/10Analysts at Axis Securities are positive on NLCIL primarily for four reasons:
Its capacity expansion Its growth in the regulated equity Its renewables focus The prospects of value unlocking through the proposed IPO of its renewables subsidiary
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Navratna Stock in Focus: NLC India
5/10Capacity Expansion: NLCIL plans to increase its current mining capacity from 50 MTPA to 100 MTPA by 2030, and its power generation capacity from 6 GW to around 20 GW by 2030.
These capacity additions would require a massive capex of Rs 1 lakh crore, which would drive growth in the regulated equity, analysts at Axis Securities wrote in a research report dated October 5.
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Navratna PSU Stock in Focus:
6/10NLCIL earns fixed returns on equity of 14 per cent and 15.5 per cent from its captive mining and power generation segments.
As of June 2024, NLCIL had a total regulated equity of Rs 9,529 crore (Rs 5,931 crore from power and Rs 3,598 crore from mining)
The management envisages the regulated equity to grow to Rs 11,000 crore by Q1 FY26 and to Rs 23,000 crore by FY30.
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Navratna PSU in Focus: NLC India
7/10With an increase in its focus on renewable energy, NLCIL plans to increase its capacity in the segment to 10 GW by 2030 from the current capacity of 1.4 GW.
For this, it has set up two subsidiaries: NLC India Renewables Ltd (NIRL) and NLC India Green Energy Ltd (NIGEL).
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NIRL IPO
8/10NIRL's proposed IPO will enable value unlocking in the renewable business for NLCIL, according to Axis Securities.
NLCIL is planning to raise funds through the IPO of NIRL by Q1 FY26.
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All eyes on NLC India Q2 FY25 Results
9/10NLC India has yet to announce the date it will release its financial results for the second quarter of FY25.
For Q1 FY25, it registered a 38.2 per cent year-on-year jump in its consolidated net profit to Rs 559.4 crore with growth of 1.8 per cent in revenue to Rs 3,375.1 crore, according to a regulatory filing.
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How NLC India shares fare among some of their peers
10/10On a trailing-12-month (TTM) basis, NLC India offers a better price-to-earnings multiple than some of its peers, according to exchange data.
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