Buy NLC India, target price Rs 93.4: HDFC Securities

HDFC Securities has buy call on NLC India with a target price of Rs 93.4. The current market price of NLC India Ltd. is Rs 78.05.

NLC India Ltd., incorporated in the year 1956, is a Mid Cap company (having a market cap of Rs 10815.77 Crore) operating in Power sector.

NLC India Ltd. key Products/Revenue Segments include Power, Coal, Lignite, Fly Ash and Consultancy Income for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 3579.15 Crore, down -9.75 % from last quarter Total Income of Rs 3966.01 Crore and up 8.01 % from last year same quarter Total Income of Rs 3313.73 Crore. Company reported net profit after tax of Rs 416.63 Crore in latest quarter.

Investment Rationale
NLC is diversifying its portfolio geographically from lignite based plants in Tamil Nadu to multi-state based and multi fuel based with projects in Uttar Pradesh, Odisha and Jharkhand. The group is also projected to add renewable capacities as a part of its expansion program. Considering the capacity addition outlook, NLC is expected to exhibit considerable revenue growth from its existing level. It expects Revenue/EBITDA/PAT to increase at a CAGR of 25%/29%/56% over FY22-24E.

Promoter/FII Holdings
Promoters held 79.2 per cent stake in the company as of 30-Jun-2022, while FIIs owned 1.21 per cent, DIIs 5.49 per cent.