NLC India (NLCINDIA)

FairStock Score: 50/100 — MIXED

Score breakdown: P/E: 2/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Promoter holding of 72.20% provides stable ownership and alignment.
• Positive free cash flow of ₹1,817 Cr supports debt servicing and capex.
• Piotroski F-Score 7/9 indicates decent financial health and operating improvement.
• Latest quarter is strong: sales ₹4,443 Cr, net profit ₹724 Cr, with profit growth of 60.46%.
• Moderate P/E of 13.81 and P/B of 2.20 are not bubble-like multiples.

Concerns

• No margin of safety: price ₹296.90 is above Graham Number ₹239.18, and DCF value of ₹119.84 is far lower.
• Altman Z-Score of 1.23 is in the danger zone, suggesting balance-sheet stress despite a D/E of 1.22.
• EV/EBITDA of 330.21 indicates the stock is not cheap on an enterprise basis once debt and charges are included.
• Top-line growth is modest at 7.31%; the 60.46% profit growth may be cyclical or one-off rather than durable.

AI Analysis

Let me judge NLC India as a business, not as a ticker. At ₹296.90, the market says P/E 13.81 and P/B 2.20—not obviously crazy. But Graham taught me to demand a margin of safety. The Graham Number is ₹239.18 and a DCF intrinsic value is ₹119.84; at today's price, the margin of safety is negative 8.73% and the price is far above both. Mr. Market is asking me to believe in a much better future than the record supports. Revenue grew 7.31% recently and 9.05% compounded over five years—a steady but boring power generator. Profit growth of 60.46% is eye-catching, but I must ask whether that is durable or just a cyclical upswing. The latest quarter had ₹4,443 Cr of sales and ₹724 Cr of net profit, so operations are not weak. Free cash flow of ₹1,817 Cr and a Piotroski score of 7/9 are encouraging. But financial health is the weak spot: debt/equity is 1.22, ROCE is only 10.51%, the Altman Z-score of 1.23 sits in the danger zone, and EV/EBITDA of 330.21 makes the low P/E less comforting. With 72.20% promoter holding there is stability, but ROE of 13.94% is partly leverage-assisted. The FairStock Score of 50/100 says mixed. I would rather wait for a lower price, a stronger balance sheet, and proof that this profit growth is repeatable. FOMO is not an investment strategy.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer