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The share price of the public sector mining and electricity generation company, NLC India, hit a historic high of ₹266 today, before closing at ₹253.15, on the NSE.
As many as 2.27 crore shares worth ₹585 crore changed hands on the exchange today.
Power generation companies are favoured today due to the growing demand for electricity and the government’s plan to build 89 GW of coal and lignite-fired projects by 2030.
On December 21, the Ministry of Power told the Parliament that peak electricity demand had gone up from 1,35,918 MW in 2013-14 to 2,43,271 MW in September 2023 — an increase of 79 per cent. This is expected to go up further.
As per 20th Electric Power Survey (EPS) report, published in November 2022, the peak electricity demand in the country in 2030-31 is expected to be 3,50,670 MW. Since all this cannot be met by only renewable energy, India is falling back on its energy mainstay — coal. Right now, 27,180 MW of thermal capacity is under construction, 12,000 MW has been bid out and 19,000 MW under clearances. The total anticipated thermal capacity addition by 2031-32 is 87,910 MW.
Against this backdrop, the market expects power generation and transmission companies to do well. The share price of NLC has steadily increased from a 52-week low of ₹69.70.
Besides, the company also reported a strong financial performance during the second quarter of current fiscal. For the quarter ended September 2023, NLC posted a PAT of ₹1,121.41 crore on revenues of ₹2,471.32 crore. For entire FY23, the net profit stood at ₹1,248.24 crore and revenue at ₹12,955 crore.
Mine allocation
Last week, NLC India received the formal ‘allotment order’ for the North Dhadu coal block in Jharkhand, which it won in the coal block auctions of August this year. It was initially expected that NLC would produce 3 mtpa of coal from the block, but today, the company’s Chairman and Managing Director, M Prasanna Kumar, told businessline that the production would be raised to 4-5 mtpa.
NLC India recently said it would invest ₹82,000 crore up to 2030, to increase its installed capacity from 6 GW today to 17 GW (11GW of thermal and 6 GW of renewable energy). It plans to invest ₹60,000 crore in thermal power plants and the mining for them and ₹22,000 crore in creating renewable energy assets. Kumar said that equity part of the investments would amount to ₹20,000 crore — all from internal accruals.
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