NLC India: How this PSU Stock Is Turning its Power Business into Renewable energy company

Synopsis: NLC India is repositioning itself from a traditional lignite-based power producer into a renewable-focused energy company, using its 6,899 MW operating base including 1,599 MW of renewable capacity, and a Rs. 25,000 crore Gujarat pipeline to target 10 GW of green power by 2030.

NLC India Ltd, a long-standing public sector enterprise in India’s power landscape, is increasingly being viewed as a company in transition rather than just a legacy thermal power player. Historically associated with lignite-based generation and mining-linked operations, the PSU is now aligning itself with the country’s broader shift towards cleaner and more sustainable energy sources.

As India accelerates its renewable energy ambitions, NLC India’s evolving strategy reflects an effort to balance its conventional power base with growing investments and capabilities in renewables, positioning the company as a hybrid energy platform adapting to structural changes in the power sector.

NLC India Limited, with a market capitalization of Rs. 35,782.16 crore, closed at Rs. 258.05 per equity share, down by 2.4 percent from its previous day’s close price of Rs. 264.40 per equity share.

NLC India Limited has delivered returns across multiple timeframes, with a 1-month return of 2.32 percent, a 3-month return of 2.14 percent, and a 6-month return of 7.97 percent The stock has delivered a 23.08 percent return in the past 1 year and in the longer frame of 5 years it has delivered a return of 401.07 percent.

NLC India Limited is a Navratna Central Public Sector Enterprise under the Ministry of Coal, Government of India, with a history dating back to 1956. Headquartered in Neyveli, Tamil Nadu, with its registered office in Chennai, the company has long been a key player in India’s power ecosystem. Traditionally known for its lignite mining and thermal power generation, NLC India has built its operations around fuel security and reliable electricity supply, supplying power to multiple states and contributing to India’s base-load power requirements.

Today, NLC India operates at a meaningful scale, with installed power generation capacity of 6,899 MW, supported by mining capacity of over 50 million tonnes per annum (MTPA) across lignite and coal. While thermal power remains central to its operations, the company is now using this legacy platform to pivot toward a cleaner and more diversified energy future.

Mining to Power Generation

At the core of NLC India’s business model lies integration. The company mines lignite and coal and uses this fuel primarily for its own thermal power plants. This integrated structure reduces dependence on external fuel sources and supports predictable power generation. Thermal power continues to play a critical role for NLC India by providing round-the-clock electricity, ensuring grid stability and dependable supply even when renewable sources are intermittent.

While thermal power remains an important cash-generating pillar, NLC India’s strategy increasingly reflects a balance between energy security and energy transition. The company is using the strength of its legacy assets to fund and support expansion into new-age energy segments.

Renewable Energy Takes Centre Stage

The most visible shift in NLC India’s strategy is its aggressive move into renewable energy. To spearhead this transformation, the company has established NLC India Renewables Limited (NIRL), a wholly owned subsidiary that functions as its dedicated 100 percent renewable energy arm. Through NIRL, NLC India is developing solar, wind, hybrid renewable projects and battery energy storage systems, marking a decisive break from its earlier thermal-only identity.

Renewables already form a meaningful part of the portfolio, with 1,599 MW of renewable capacity included in the current 6,899 MW installed base. The company’s ambition, however, goes much further. Under its Corporate Plan, NLC India has set a clear target of achieving 10 GW (10,110 MW) of renewable energy capacity by 2030, signalling a structural shift from a predominantly thermal utility to a balanced energy producer.

The Gujarat Government MoU

A key milestone in this renewable journey is the Memorandum of Understanding signed with the Government of Gujarat in January 2026 during the Vibrant Gujarat Regional Conference held in Rajkot. The non-binding MoU envisages the development of large-scale renewable energy projects in the Saurashtra and Kutch regions, covering solar, wind, hybrid and battery energy storage projects.

The proposed investments under this collaboration are estimated at approximately Rs. 25,000 crore, indicating the scale at which NLC India plans to expand its renewable footprint. The projects are to be developed through NIRL, reinforcing the subsidiary’s role as the execution vehicle for green energy growth. Under the MoU, the Government of Gujarat will facilitate statutory approvals, clearances and regulatory support, enabling time-bound implementation. This partnership not only strengthens NLC India’s project pipeline but also reinforces Gujarat’s position as a leading renewable energy hub.

Energy Storage and Grid Readiness

Beyond generation, NLC India is focusing on energy storage to make renewable power more reliable. Battery Energy Storage Systems (BESS) form an integral part of the company’s renewable plans, allowing excess power generated from solar and wind to be stored and supplied during peak demand. This focus on storage reflects an understanding that renewable scale must be accompanied by grid stability.

In parallel, the company is also planning pumped storage projects, which act as large-scale energy storage solutions. These initiatives support NLC India’s broader objective of enabling 24/7 power availability while increasing the share of clean energy in its portfolio.

Financials

Revenue in Q2FY26 stood at Rs. 4,178 crore, registering a YoY growth of 14.3 percent compared to Rs. 3,657 crore in Q2FY25, and a QoQ growth of 9.2 percent over Rs. 3,826 crore in Q1FY26. This indicates a steady improvement in topline performance on both an annual and sequential basis.

EBITDA for Q2FY26 came in at Rs. 1,400 crore, showing a strong YoY growth of 38.2 percent over Rs. 1,013 crore in Q2FY25 and a QoQ growth of 49.7 percent from Rs. 935 crore in Q1FY26, reflecting significant operating leverage. However, profit after tax declined to Rs. 725 crore, down 26.2 percent YoY from Rs. 982 crore in Q2FY25 and lower by 13.6 percent QoQ compared to Rs. 839 crore in Q1FY26, indicating pressure at the net profit level despite robust operating performance.

A return on equity (ROE) of about 14.5 percent and a return on capital employed (ROCE) of about 10.5 percent, and debt to equity ratio at 1.22 demonstrate the company’s financial position. The stock is currently trading at a P/E of 13.7x lower as compared to industry P/E of 25.5x.

Preparing for the Future

NLC India’s transition strategy goes beyond solar and wind. The company is setting up green hydrogen pilot projects using renewable electricity, initially for internal consumption, with the potential for future expansion. It has also started developing electric vehicle charging infrastructure at its project locations, aligning with the broader clean mobility ecosystem.

Additionally, NLC India is undertaking waste-to-wealth initiatives such as converting mining overburden into M-Sand, along with exploring environmental management and carbon-related projects. These efforts reflect a broader sustainability mindset embedded into the company’s operational planning.

The renewable expansion and diversification strategy aligns closely with India’s national objectives of increasing non-fossil fuel-based power generation and progressing toward Net Zero emissions. By combining its legacy strengths in mining and thermal power with aggressive investments in renewables and storage, NLC India is positioning itself as a transition-ready PSU rather than a sunset-sector utility.

Capacity Expansion

Capacity expansion sits at the centre of NLC India’s transformation strategy. By 2030, the company plans to expand its operations across mining, thermal power and renewables in a balanced manner. Mining capacity is targeted to rise to around 104.35 MTPA from 50.1 MPTA, ensuring long-term fuel security. Thermal power capacity is planned to increase to about 10,020 MW from 5,960 MW, supporting base-load requirements and grid stability.

The most striking shift is on the renewable side, where renewable capacity is planned to scale up to approximately 10,110 MW by 2030. This would move NLC India toward a near 50:50 mix between thermal and renewable power, compared to its historically thermal-heavy profile. The overall expansion plan underscores the company’s intent to remain relevant in a decarbonising power sector while retaining the stability of conventional assets.

NLC India Ltd’s evolution illustrates how a traditional public-sector power company can adapt to changing energy realities.  With 6,899 MW of current capacity, 1,599 MW already in renewables, a Rs. 25,000 crore renewable pipeline in Gujarat, and a 10 GW renewable target by 2030, the company is steadily reshaping its identity.

Its legacy thermal and mining operations provide stability and scale, while its renewable and storage initiatives create long-term growth visibility. With government backing, policy alignment, and a clearly articulated renewable roadmap, NLC India is transforming itself from a conventional power producer into a diversified energy platform capable of supporting India’s clean energy future.

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