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Informist, Thursday, Feb. 13, 2025

 

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--NLC India CMD: See 15-20% growth in revenue in FY26
--CONTEXT: NLC India CMD Kumar's comments in an interview with Informist
--NLC India CMD: Expect similar range of revenue growth for next 4-5 yrs
--NLC India CMD: FY26 EBITDA margin seen at 14-15%
--NLC India: Capacity expansion, renewable energy ops to aid growth in FY26
--NLC India CMD: Revenue may touch INR 377 bln by FY30 vs INR 130 bln FY24
--NLC India CMD: PAT may hit INR 45 bln-INR 50 bln by FY30 vs 18.67 bln FY24
--NLC India CMD: Have planned total capex of INR 1.25 tln till FY30
--NLC India CMD: To invest INR 534 bln to expand thermal capacity till FY30
--NLC India CMD: INR 500 bln-INR 600 bln invest on renewable energy by FY30
--NLC India CMD: To invest INR 10 bln on green energy initiatives till FY30
--NLC India CMD: Aim 104 mln tn/yr mining capacity by FY30 vs 50 mln tn now
--NLC India CMD: Exploring mining of critical minerals in India, overseas
--NLC India CMD: Aim 1 mln tn capacity by FY30 in critical minerals space
--NLC India CMD: Aim 20 GW overall power generation capacity by FY30
--CONTEXT: NLC India's current power generation capacity is 6.7 GW
--NLC India CMD: Aim 10 GW renewable, 10 GW thermal energy capacity by FY30
--NLC India CMD: Working to expand pumped storage, battery storage ops
--NLC India CMD: Green hydrogen unit pilot to begin by March
--NLC India CMD: Plan to monetise arm NLC India Renewables via IPO
--NLC India CMD: Renewables arm IPO may hit market in Apr-Jun
--NLC India CMD: Plan to divest up to 49% in renewable ops arm
--NLC India CMD: Aim to use IPO proceeds to expand renewable energy ops
--NLC India CMD: To raise INR 50 bln overseas debt to repay high-cost loans
 

 

By Narayana Krishna

 

HYDERABAD – A robust plan for capital expenditure to add capacity in mining and power generation and various green energy initiatives are set to drive NLC India Ltd.'s next leg of growth. After its transformation from a pure lignite mining entity into one of the country's major energy producers, the company now has ambitious plans to scale up its revenue.

 

"There will be a revenue increase of around 15-20% for 2025-26 (Apr-Mar), and the revenue growth is expected to remain similar over the next four-five years on average. We are currently at INR 130 billion in revenue and targeting INR 377 billion by FY30," Chairman and Managing Director Motupalli Prasanna Kumar told Informist in an interview on Tuesday. 

 

"On the profit side, from the current INR 18 billion, we are targeting INR 45-50 billion by FY30," he said. 

 

NLC India reported a consolidated net profit of INR 18.67 billion on revenue of INR 129.9 billion for FY24. For the nine months ended December, it's consolidated net profit was INR 21.39 billion on revenue of INR 114.45 billion. For the whole of FY25, the company expects a net profit of nearly INR 31 billion on revenue of INR 168 billion. 

 

As on Dec. 31, 26% of NLC India's revenue came from mining, while power operations accounted for 72%.

 

Kumar said planned expansion in mining, additional capacity in coal-based and lignite-based thermal power generation, and growth in the renewable energy portfolio were expected to help achieve the revenue target for FY30. 

 

NLC India has a large capital expenditure plan of INR 1.25 trillion over five years to fund its expansion, Kumar said, adding that a significant portion of this spending would pick up from FY26. The company plans to invest nearly INR 152 billion on expanding mining operations, up to INR 534 billion on thermal power, and up to 600 billion on renewable and green energy capacities.

 

NLC India expects to maintain an earnings before interest, tax, depreciation and amortisation margin of 14-15% for FY26 and beyond. Kumar said there might be an upside of about 100 basis points in some quarters, but on an average, the margin would remain at this level. 

 

Increasing thermal power generation is necessary to meet rising demand in the coming years, Kumar said, adding that while renewable energy initiatives are progressing, they have limitations due to the intermittent nature of power generation. He noted that demand for coal and lignite, along with thermal power, would grow significantly as the country pursues ambitious growth plans for 2047.

 

"Around four years back, there was projections from CEA (Central Electric Authority) where they were contemplating the stoppage of any capacity addition by thermal power plant and but subsequently, after the global energy and national energy crisis, that strategy is revised. The Ministry of Power is also focusing on capacity addition of 80 GW in the next three-four years. Our expansion plans are also tuned to that aim," Kumar said.

 

"What I foresee is that as our energy requirement grows exponentially, coal will remain the country's major energy supplier even beyond 2047. We are targeting net zero by 2070, but even then, coal will play a crucial and dominant role due to its affordability and availability." 

 

By FY30, NLC India expects 50% of its revenue to come from coal and lignite mining, while the rest will come from its power business – thermal, renewable, green energy, and power trading – Kumar said.

 

Of the planned capital expenditure of INR 1.25 trillion till FY30, INR 500 billion-INR 600 billion will be allocated to renewable energy, up to INR 534 billion to thermal, and around INR 10 billion to green energy initiatives as the sector is poised for robust growth, he added.

 

The company plans to fund 25-30% of the total capex planned through equity and rest through debt. Kumar said the equity part would come from internal accruals, and the debt would be raised as and when required.

 

NLC India also plans to raise INR 50 billion in overseas debt soon to refinance a part of its high-cost loans and support its growth plans, Kumar said. As of Dec 31, the company's consolidated debt was INR 220 billion.  

 

MINING EXPANSION

NLC India plans to expand its coal and lignite mining operations while also venturing into new areas such as critical minerals, Kumar said. The company has set a target of 104 mln tonnes per year of mining capacity by FY30, up from the current 50 mln tonnes. This will be achieved by expanding existing mining capacity, as well as acquiring new coal blocks. The company aims to expand its lignite mining capacity to 41.4 million tonnes from 30.1 million tonnes and coal mining capacity to 62 million tonnes from 20 million tonnes.

 

NLC India is actively participating in bids to acquire new coal and critical mineral mines in India. In the critical minerals space, it is also exploring overseas opportunities, with a target of at least 1 mln tonnes of capacity.

 

The company has already secured three commercial coal blocks in earlier auctions, and submitted bids for three more in the recent auctions, Kumar said. 

 

"We want to proactively use our 60 years of mining experience. We are participating in the auction of critical minerals because we feel that going forward, critical minerals are very important for the country's energy transformation as well as progress. That is the reason why we participated in the last three rounds of the commercial critical metal auction and in the current one also, we are going to participate," he said.

 

POWER PLAY

The company aims to expand its total power generation capacity to 20 GW by FY30, up from the current 6.73 GW. Of this, 10 GW will come from thermal power and 10 GW from renewable and green energy sources, Kumar said. The company currently has nearly 5.3 GW of thermal capacity and 1.4 GW of renewable energy capacity. While focusing on improving the efficiency of its existing thermal plants – both coal- and lignite-based – the company is equally committed to expanding its renewable and green energy initiatives. The current plant load factor of its power units stands at 69%, Kumar said. NLC India has power purchasing agreements with several state utilities, though the major part of this goes to Tamil Nadu.

 

The company is also developing pumped storage and battery storage projects. NLC India expects its pilot green hydrogen project to commence by March. Depending on its success, it plans to scale up investment in this segment, KUmar said. While the company is yet to detail the investments marked for green hydrogen and pumped storage projects, it has engaged a consultant to advise on this.

 

The company also plans to develop a 100 MW (2x50 MW) pumped storage unit in Neyveli. 

 

IPO PLANS 

To monetise its renewable energy assets and fund future growth, NLC India is planning an initial public offering for its subsidiary NLC India Renewables Ltd. The company is in the process of securing regulatory approvals and tax incentives, Kumar said. As part of the plans, the company is transferring its renewable assets with a total capacity of 1.4 GW to the subsidiary.

 

If everything goes as planned, the IPO could hit the market around Apr-Jun. The company plans to offer up to 49% stake in NLC India Renewables through the IPO, but is yet to arrive at a final valuation for the issue. It declined to share the details, citing regulatory hurdles.  End

 

Edited by Avishek Dutta

 

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