Prabhudas Lilladher has recommended accumulate rating on Neyveli Lignite Corporation with a target of Rs 179 in its July 28, 2010 research report.
"Neyveli Lignite Corporation's (NLC) Q1FY11 revenues rose to Rs 11.45 billion, up 29% YoY. Operating profit stood at Rs 4.8 billion, up 46% YoY and profitability of Rs 3.4 billion, up 19% YoY. Pending finalization of tariff by CERC, NLC has provisionally accounted for revised tariffs as per the guidelines issued by Ministry of Coal on lignite pricing & CERC norms for capacity charges. Captive fuel, strong balance sheet and high visibility of cash flow make NLC an attractive stock for a defensive portfolio. Revision in tariffs and commissioning of 750MW in FY11 would keep the revenue momentum. Also, NLC would be commissioning 50MW of solar power capacity in the current year. Any breakthrough in new ventures like Wind power, Coal mining and UMPP's can have substantial potential upside to the stock. We maintain accumulate on the stock with a target of Rs 179," says Prabhudas Lilladher research report.
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