Power stock to buy now for an upside of 33%; Recommended by Axis Securities

Synopsis:
With strong quarterly results, the firm reported double-digit revenue and profit growth, driven by operational efficiency and expansion in renewables. Strategic investments, capacity additions, and new project wins highlight its long-term growth vision, supported by substantial capex and diversification into critical minerals.

As of fiscal year 2025-26, India’s power sector has an installed capacity of 476 GW. A significant shift towards clean energy is underway, with non-fossil fuels accounting for nearly half of this capacity at 235.7 GW. This diverse mix, which generated over 1,821 billion units in the preceding fiscal year, is expanding to meet rising national energy demands.

With a market capitalization of Rs 31,060.66 crore, the shares of NLC India Ltd were trading at Rs 224.00 per share, decreasing around 1.61 percent as compared to the previous closing price of Rs 227.70 apiece.

The company currently has 1.4 GW of renewable energy capacity. It expects to increase this capacity to 10 GW by 2030. The company expects its 300 MW of Barsignsar solar project and 50 MW of solar project at unmined reclaimed lands by Sep.25. NLCIL targets to add 1 GW in FY26 and 1.5 GW in FY27. Post FY27, 1.5 GW of capacity would be added each year to reach its target of 10 GW. 

In Q1FY26, the company did a capex of Rs 1,925 Cr, with FY26 target capex being Rs 5,078 Cr. For its capacity expansion, it expects a capex outlay of Rs 1.16 Lc Cr by 2030. The capex targets for FY27, FY28, and FY29 are Rs. 19,000 Cr, Rs 20,000 Cr, and Rs 20,000 Cr respectively.

Axis Securities, one of the well-known brokerages in India, has given a ‘Buy’ rating on this power stock with a target price of Rs 300 apiece, indicating a potential upside of 33.92 percent from Friday’s price of Rs 224 per share.

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The company delivered a strong Q1FY26 performance with revenue rising 13 percent year-on-year to Rs 3,826 crore from Rs 3,376 crore. Net profit also showed impressive growth, climbing 48 percent to Rs 839 crore compared to Rs 567 crore in Q1FY25, reflecting improved operational efficiency and healthy business momentum.

In Q1 FY25-26, NLCIL achieved several milestones, including the dedication of Unit-1 (660 MW) of the Ghatampur Thermal Power Station by the Prime Minister and oil synchronization of Unit-2. The company also secured approvals for a ₹7,000 crore investment in NIRL and entered the critical minerals sector with new block allocations.

Additionally, NLCIL advanced in renewable and sustainable initiatives, winning a 250 MW/500 MWh battery storage project in Tamil Nadu and receiving NTPC’s LoA for a 450 MW wind-solar hybrid project. With forest clearances, MoUs, and land acquisitions progressing, the company reported a strong Q1 performance, achieving ₹1,925.62 crore revenue, 113% of its target.

NLC India Limited is an India-based company that is engaged in the business of mining of lignite, coal, and the generation of power by using lignite as well as renewable energy sources and consultancy. The Company’s segments include Mining and Power generation.  

Written by: Abhishek Singh

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