NLC India Ltd.
ISIN: INE589A01014 • Market Cap: ₹37,377 Cr
The 5-Pillar Quality Audit for NLC India Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (37.6%), Return on Capital Employed (9.9%), and equity compounding (13.9%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 1.20 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (4.4%) and 3Y PAT CAGR (34.1%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 11.65 vs PEG of 0.62 and Dividend Yield of 1.4%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 69.5%, backed by 21.9% institutional ownership.
Key Fundamental Strengths
High-Velocity Profit Compounding (3Y PAT CAGR: 34.1%)
Net earnings have compounded at 34.1% annualized, demonstrating operating leverage.
Attractive Valuation Margin (P/E: 11.65)
Trading at a P/E multiple of 11.65, the stock offers a favourable risk-reward entry for quality compounding.
Areas to Watch & Potential Risks
Subdued Capital Efficiency (ROCE: 9.9%)
A sub-12% ROCE suggests return on capital barely exceeds the company's weighted average cost of capital (WACC).
Elevated Financial Gearing (D/E: 1.20)
Debt-to-Equity exceeds 0.9x, meaning substantial operating earnings are absorbed by mandatory interest coverage.
Topline Stagnation (3Y Sales CAGR: 4.4%)
Revenue growth has slowed below inflation rates, indicating cyclical demand slowdown or saturated core markets.
Quantitative Strategy Eligibility
Checking NLCINDIA against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 72/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Provides balanced valuation margin with strong profitability scores.
Power Sector Peer Comparison
Compare NLCINDIA directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| NLC India Ltd. (NLCINDIA)Current | 72/100 | ₹37,377 Cr | 11.65 | 9.9% | 1.20 | — |
| Adani Power Ltd. (ADANIPOWER) | 70/100 | ₹3.93 Lakh Cr | 27.56 | 15.7% | 0.82 | View |
| NTPC Ltd. (NTPC) | 69/100 | ₹3.25 Lakh Cr | 11.69 | 8.3% | 1.32 | View |
| Power Grid Corporation of India Ltd. (POWERGRID) | 64/100 | ₹2.44 Lakh Cr | 15.36 | 10.6% | 1.47 | View |
| Adani Green Energy Ltd. (ADANIGREEN) | 56/100 | ₹2.12 Lakh Cr | 119.11 | 8.3% | 5.24 | View |
| Adani Energy Solutions Ltd. (ADANIENSOL) | 66/100 | ₹1.88 Lakh Cr | 64.52 | 8.7% | 2.02 | View |
Frequently Asked Questions: NLC India Ltd.
Q:What is the 5-Pillar Fundamental Score for NLC India Ltd. (NLCINDIA)?
NLC India Ltd. has a RupeeTools Fundamental Score of 72/100, placing it in the 'Solid & Healthy' category. Its pillar scores are: Profitability (74/100), Financial Health (58/100), Growth (70/100), Valuation (85/100), and Ownership Quality (82/100).
Q:Is NLCINDIA fundamentally strong for long-term investment?
Yes, NLCINDIA exhibits solid fundamental strength with a 72/100 score, driven by a return on equity of 13.9% and a debt-to-equity ratio of 1.20.
Q:Does NLCINDIA pass the Coffee Can Investing filter?
No. NLCINDIA does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does NLCINDIA compare against other Power peers?
Within India's Power sector, NLCINDIA trades at a P/E of 11.65 and generates an ROCE of 9.9%. Compare its 5-Pillar score of 72/100 against top sector peers like Adani Power Ltd. (70/100), NTPC Ltd. (69/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.