NLC India Limited (NLCINDIA.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to NLC India Limited Q1 FY '26 Earnings Conference Call hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mohit Kumar from ICICI Securities. Thank you, and over to you, Mr. Kumar.

Thank you, Rinju. Good evening. On behalf of ICICI Securities, I welcome you all to the Q1 FY '26 Earnings Call of NLC India. Today, we have with us from the management, Shri M. Prasanna Kumar, CMD; Suresh Chandra Suman, Director, Mines and Director, Planning and Projects Additional Charge; Shri M. Venkatachalam, Director, Power; Shri Samir Swarup, Director, Human Resources; and Shri Prasanna Kumar Acharya, Director, Finance and CFO. We'll start the call with brief opening remarks by the management, which will be followed by Q&A. Over to you, sir.

Thank you, Mohit ji, for the introduction, and warm thank you to ICICI Securities for hosting this investor conference call. I also want to extend my gratitude to all the participants for your interest in NLCIL and to our investors for your unwavering support. Today, I'm happy to engage with NLCIL shareholders and address any questions you might have regarding our financial results for the quarter ended June 30, 2025, as well as provide updates on our capacity addition program. Your involvement and feedback are invaluable to us, and I look forward to a productive discussion. I, Prasanna Kumar Motupalli, Chairman and Managing Director of NLC India Limited. And joining with me are Dr. Suresh Chandra Suman, Director, Mines and Director, Planning and Project Additional Charge; Shri Samir Swarup, Director of Human Resources; Shri M. Venkatachalam, Director, Power; and Dr. Prasanna Kumar Acharya, Director of Finance, along with senior management of the company. Before the interaction, I would like to brief on the major highlights and performance of NLCIL during the quarter ended June 30, 2025. The Honorable Prime Minister of India has dedicated Unit 1 of NUPPL 660 megawatt, Ghatampur Thermal Power Station to the nation. The Cabinet Committee on Economic Affairs, CCEA in its meeting dated 16th July 2025, provided the approval for making the investment to the tune of INR 7,000 crores in NLCIL India Renewables Limited, NIRL beyond the investment limit prescribed by the Navratna guidelines issued by DPE. NLCIL has successfully achieved oil synchronization of Unit #2, 660 megawatt of Ghatampur Thermal Power project. NLCIL has been declared as preferred bidder for Semhardih Phosphorite and Limestone Block and Raipura Phosphorite and Limestone Block of Balod, Chhattisgarh in the auction of critical and strategic mineral blocks by Ministry of Mines. This is NLCIL's maiden entry into critical minerals mining business. Government of Tamil Nadu has granted permission for disposal of overburden soil from the external dumps of mines and to produce M-Sand from overburden. For Machhakata revised OCP, land acquisition MOC has issued notification under Section 4(1) of CBA Act A&D1957. NIRL has been awarded with combined capacity of 250 megawatt, 500 megawatt battery storage system project by Tamil Nadu Green Energy Corporation Limited under Viability Gap Funding scheme. NLCIL has received LoA from NTPC for setting up of 450 megawatt of ISTS connected wind-solar hybrid power project. NLCIL has entered into MoU with IREL Limited to collaborate in the critical minerals sector. MoEF and CC has granted Stage 2 forest clearance for Pachwara South OCP of NUPPL. MoC has issued notification under Section 9(1) of CBA A&D Act 1957 in respect of North Dhadu (Western Part) coal block. CapEx achievement for quarter 1 '25-'26 is INR 1,925 crores, which is 113% against the target of INR 1,708 crores up to June '25. NLCIL group has achieved revenue from operations of INR 3,825 crores as against INR 3,378 crores in the previous year, registering a growth of 13.25%. NUPPL has generated INR 642 crores revenue from operations for the part of quarter ended June 2025. NLCIL Group has achieved a total income of INR 4,115 crores as against INR 3,642 crores in the corresponding period of the previous year, registering a growth of around 13%. NLCIL Group has achieved a profit after tax for the quarter ended Q1 of 2025-'26 is INR 839 crores as against INR 566 crores in the previous year of quarter 1 of '24-'25, registering a growth of 48%. And I'm happy to say that since we can stride towards Atmanirbhar Bharat in line with the vision of Honorable Prime Minister of India, Shri Narendra Modi ji, NLC India Limited has signed a historic memorandum of understanding with Bhabha Atomic Research for the pioneering project to extract rare earth elements from clay ash. With this, I thank all the investors for the outstanding support to the company. And I thank all the participants in today's investor call for giving encouragement to team NLCIL and at the same time, giving valuable suggestions. I assure that whatever commitments we have given and the time lines we have given, we will be putting all efforts to ensure that these commitments are met and increase the returns to investors. Thank you all.

Speakers, should we open the line for questions?

Yes.

[Operator Instructions] The first question comes from the line of Aditya Welekar with Axis Securities.

My question is on the thermal power tendering and update on the expansion projects. So first on the Ghatampur Unit 2 and 3, when are we expecting the COD? And related to that, South Pachwara coal block post the CC grant of CC, when we are expecting the commercial production? And within that, what is our status on tendering of Talabira Phase 1, Phase 2 and TPS-2 second expansion?

As you know, Ghatampur Unit #1, the COD was declared in the month of December 2024 and the unit is running well and almost generated 2.6 billion units as on date. And Unit #2, we already carried out [indiscernible] at one go a month back. And we are targeting to declare the COD by end of September. Similarly, the Unit #3, all activities are in fast progress. We are targeting to declare the COD by end of December of the current calendar year. Coming to South Pachwara, there was a major achievement. We got the Phase 2 forest clearance. And subsequently, all the actions for handing over of the forest land and all other activities are in fast progress, and we are targeting to start the coal production in the current financial year. Now coming to the tendering of the Talabira Stage II, the forest -- the environmental clearance activities are going on. And we are ready with the tender document, and we will be floating in next 3 months period. Similar is the case with the Neyveli 2 x 500-megawatt thermal power station that also we are ready with the tender document, and we will be floating the tender by October.

Okay. Just a follow-up on that, sir, then we also have Rajasthan lignite thermal of 375 megawatt, which is under evaluation. So is there any progress on that?

Yes. Recently, we formed that JV with Rajasthan Government for establishing that 375 megawatts. So all the activities are in fast progress. We'll be coming up with the tender at the earliest.

Okay. My second question is with respect to our renewable energy capacity additions plan. What is the RE capacity which we added in Q1? And if you can once again reiterate the guidance of RE capacity addition for this fiscal and next coming 2 fiscals?

So as on date, we are having 1.4 gigawatt of renewable capacity and we generated more than 2.2 billion units of power in the last financial year. And our target is to achieve 10 gigawatt capacity by 2030. So all actions are in place for achieving this 10 gigawatt by 2030. In quarter 1, we have not added any capacity. But our 300-megawatt renewable project in Barsingsar, around 70 megawatt is already installed. And we are going to start 50 megawatt any time now. And by September end, we will be commissioning the entire 300 megawatt. And similarly, 50-megawatt solar project on mine reclaimed land, which is first of its kind in the country. That is in the almost final stages of commissioning. So we will be commissioning that in the month of -- by end of September.

So we had basically in the previous call, we said that we will be adding 1 gigawatt in FY '26, 1.5 in '27 and post that 1.5 gigawatt each year. So that target still holds?

Yes. That target still holds. We'll be adding more than that.

Next question comes from the line of Arihant with Bowhead.

Just wanted to know what was the under recovery in first quarter FY '26? And can you provide breakup plant-wise, what was it in TPS-2, TPS expansion?

So in the quarter 1, the under recovery total on a consolidated basis is INR 334 crores. Out of that for NLC, Neyveli units is INR 245 crores. And if you want to break up the majority of this is TPS-2 expansion, where the unit was under shutdown for the major modification, which we are carrying out. And now that major modification is completed. So going forward, the reliability of unit will be improved and under recovery will come down.

Sir, was there any under recovery in Ghatampur unit?

In Ghatampur unit, it was starting phase. That's why there was a minor under recovery of around INR 71 crores. But going forward, that will be compensated and we'll be recovering full fixed charges for the Ghatampur.

Okay. Sir, I wanted to know since Ghatampur Unit 2 and Unit 3 will come up later this year, and it will take some time to ramp up those units. So will there be under recovery in those units in the current fiscal year in FY '26? And what would be the approx amount?

See, in December, we declared COD of Unit #1. That unit is running well. And we are expecting that in the current financial year for Unit #1, there will not be any under recovery. And these units are very stable. And we hope the same for the other units also. The initial problems will be very less and the units will run in a sustainable manner.

Okay. And sir, what is the total under recovery we are expecting in FY '26?

For total all the units?

Yes.

So whatever measures we are taking with those measures, we are expecting that we will be -- the under recovery will be much less than what was there in the last financial year.

Okay. Sir, I wanted to know regarding Talabira mine, what was the PBT from Talabira mine in first quarter? And can you also provide what was the realization from e-auction and NTPC, respectively, and the quantity sold in both the cases?

So in quarter 1, the EBITDA is INR 218 crores for Talabira and in quarter 1, the total value is INR 610 crores compared to INR 466 crores in the last financial year. And through e-auction, the rate is INR 1,024 against last year's INR 1,354. 2 and 3C, it is through MoU route [indiscernible] and for our NTPL it is INR 595.

And sir, one more thing regarding Rajasthan 2 gigawatt solar JV project, which we have and also Assam 1 gigawatt JV project. So wanted to know, have we got the land for this project? What time lines are we thinking for acquiring this land and probably when we will go for tender for these projects?

Regarding Assam, where we are targeting addition of 1 gigawatt capacity in the Northeast Minister's conference last month, we got the land for 500 megawatts. So we are making due diligence and our tender documents are ready, and we will go for tendering at any time. And apart from that also, for 150 megawatt also, land parcel is identified, and we are making due diligence. The drone survey is already completed. So that 150 megawatt also, we will go for tender at the earliest. And we are in the process of setting land for balance 300 megawatt. In Rajasthan, the joint venture was formed recently. And we are in the process of identifying the land, and we are hopeful that within 3 months, we will be identifying the entire land and the projects will be completed within 15 months.

And sir, last question, I wanted to know on the Talabira power plant project. So have we acquired the complete land for that project? And has the BHEL started construction activity for that project? And also, we will be acquiring the land for Phase 2 of that project along with Phase 1 or will that be acquired separately?

See, we require around 880 acres of land for Phase 1 and Phase 2. And we are in the process of possession of 808 acres of land, only 71 acres of land is pending. So 808 acres of land is already handed over to BHEL. And BHEL started their preliminary activities of compound wall site leveling and structure demolition work that is already started. So -- and the engineering activities are also in fast progress, drawing approvals, everything is going on as per our time line.

Okay. So Phase 2 project land also we will acquire along with the Phase 1?

Yes. That is along with Phase 1 we acquire.

[Operator Instructions] Next question comes from the line of Mohit Kumar with ICICI Securities.

I have 2 questions. First is on this, sir, how has been the progress on the modification of TPS Stage 2, both the units? And is it fair to expect normal operation by Q2 FY '26? Or do you think we should bake in numbers from Q3?

So as you know, this TPS 2 expansion, 1 unit major modification we already completed. That is recently completed. And after the modification, the performance of unit is comparatively better. And we will be going for the modification of Unit #2 in the quarter 3. So once that is done, we are hopeful that the under recovery will be minimal. So you can take it from the quarter 4 because the second one modification we are going to do in the quarter 3.

Understood, sir. My second question is how are you booking revenues in Ghatampur? Is it at 90% or 85% actual capital cost? And what is the status of tariff petition for the capital cost approval for Ghatampur?

Yesterday itself, the interim tariff order of ERC is issued and it is at 85%.

85% is that right, sir? We are taking the same number for booking our revenues. Is that right?

Yes.

And when do you expect the final capital cost approval, sir?

So that will take some time. Maybe after Unit 3 completion only that will come.

[Operator Instructions] Next question comes from the line of Viraj Mithani with Jupiter Financial.

My question is regarding this rare earth minerals. Can you give some color on that, the JV on rare earth mineral like how will be -- when will come into full like in the production and a little bit more color on that would be nice.

Okay. So we are having experience of more than 7 decades in mining operations. So we want to use that experience. That's why we are entering into mining of critical minerals as well as rare earth elements. In the critical minerals, we got 2 blocks. We participated in all tranches of auctions, and we got 2 blocks in Chhattisgarh of phosphorite blocks and all activities are in fast progress. In addition to that, we are trying to get some critical mineral and rare earth element blocks abroad. So we are in discussion with some companies through IREL and [indiscernible]. And it is in the preliminary stage. We signed the NDA with them, and we are awaiting due diligence of these blocks. These are in the Republic of [indiscernible].

Mr. Mithani, are you done with your questions? Since there is no reply from the line of Mr. Mithani, we'll promote the next participant that is from the line of Darsh Solanki with Axis Securities.

Sir, I just wanted to check one thing. In our presentation uploaded on the website, our CapEx outlook till FY '30 is close to INR 1.16 lakh crores. So I just wanted to check how much of this CapEx is expected to be done in FY '26 and FY '27?

See, that 1.16 lakh crores that is for up to 2030 spread over next 5 years. So in the year '26-'27, we are targeting CapEx of INR 19,000 crores.

Both years?

'26-'27 -- financial year '26-'27, INR 19,000 crores and in '27-'28 also around INR 20,000 crores and '28-'29 around INR 20,000 crores.

And sir, next question is regarding the IPO. So you said that the IPO we are targeting to go by Q2 of FY '27. So are we still on that same time line?

Yes. All positive developments are happening. First development was we got exemption from government for tax exemption in the shortest possible time. And subsequently, there was approval from cabinet for transfer of assets from NLC to NIRL. So all actions are going on smoothly, and we are hopeful that we will be able to achieve those time lines.

Next question comes from the line of Nikhil Abhyankar with UTI Mutual Funds.

Sir, just want to know the EBITDA and gross block for the RE capacity as of FY '25. So can you just give the full year EBITDA for FY '25 and the gross block?

EBITDA for renewables in 2024-'25 was INR 627 crores. And in the quarter 1 of this financial year, it is INR 153 crores. So renewable capacity is performing exactly in line with the last year. The generation and all other parameters are exactly same.

And sir, what would be the gross block for the renewable capacity?

It will be around INR 6,000 crores.

INR 6,000 crores. And sir, also can you give us the cost of production per tonne for Talabira coal and PBT did you mention earlier for this quarter?

For Talabira -- are you asking the cost of sale or cost of production?

Cost of production.

I think we'll communicate that separately.

And PBT, sir, for this quarter?

PBT for the quarter 1 in Talabira is INR 209 crores.

INR 209 crore and sir, I just want to go back to the numbers of FY '25. I just want to know how many one-off income was booked for the entire year in FY '25?

One-off income?

Yes.

You're talking about Talabira or [indiscernible]?

No, no, the entire company, NLC as a whole, consol.