NLC India plans significant growth in lignite production

NLC India is in the spotlight after a report revealed that the company fell short of its lignite production target for the financial year 2024. It produced 23.68 million tonnes of lignite, only 83.36% of its goal of 26.5 million tonnes. NLC India was the only coal-producing public sector company that did not meet its target. The shortfall was mainly due to delays in land acquisition for its thermal power station–II. This issue also impacted revenue, which dropped by 19.6% to about 12,999 crore. The difficulties around land acquisition have been ongoing and contribute to operational challenges. Despite the setbacks, NLC India's management is optimistic about the future. They announced that problems regarding land acquisition have been addressed and that all units are now operating at full capacity. Revenue has already started to bounce back, with a 21% increase in the first nine months of FY25 compared to the previous year. Additionally, the company has set ambitious plans for growth, targeting a mining capacity increase to 102 million tonnes by 2030. It also aims to expand its renewable energy capacity significantly. Recent projects in renewable energy are progressing, including a 200 MW wind project that will help reduce greenhouse gas emissions. Financially, NLC India's net profit grew by 28% year-on-year to 2,245 crores. Analysts are cautiously optimistic, noting that any delays in project execution could hinder this growth. However, if the company stays on track, it is expected to see improved profit margins and a stable return on equity. NLC India's stock has seen fluctuations but has recently gained interest from institutional investors. Both foreign and domestic institutional investors have increased their stakes, reflecting growing confidence in the company. Overall, while past challenges remain in focus, NLC India's recovery efforts and growth plans signal a positive outlook for the near future. The company stands on the brink of significant growth potential if operations proceed as planned.