NLC India has formed a joint venture with the National Aluminium Company (Nalco) to develop a 1,080 MW thermal power plant, marking a significant collaboration between the two public sector undertakings.

The Board of Directors approved the incorporation of the joint venture company at its meeting held on September 29, 2026. The entity, tentatively named NLC Nalco Power Limited, will see equal equity participation from both partners.

Joint venture details

The partnership between NLC India and Nalco is aimed at establishing a thermal power generation facility with a capacity of 1,080 MW. The joint venture brings together the expertise of both companies in the energy and natural resources sectors. The plant will be developed in phases to meet the captive power requirements of Nalco.

Regulatory approvals and structure

The formation of the joint venture received approval from the Department of Investment and Public Asset Management (DIPAM) via the Ministry of Coal on September 8, 2026. The shares of the proposed company will be acquired by way of cash subscription at a face value of ₹10 each.

The joint venture will also explore options for long-term Power Purchase Agreements (PPA) for the renewable energy requirements of Nalco, subject to statutory and administrative approvals.

Strategic significance

The collaboration between NLC India and Nalco represents a notable development in India's public sector power generation landscape. Both entities are government-owned enterprises, and the joint venture pools their respective capabilities to pursue large-scale thermal power capacity addition. This move aligns with the strategic objective of securing reliable power supply for industrial operations while leveraging existing expertise in energy generation.

NLC India reported a 9.76% year-on-year increase in Profit Before Tax (PBT) for the first quarter of FY27, reaching ₹652 crore. This follows a record FY26 performance where the company declared a total dividend of 38.5%.

Q1FY27 operational and financial highlights

The company disclosed strong growth metrics for the quarter ending June 30, 2026. Coal production rose 7.84% to 4.09 million tonnes, while lignite production increased 16.64% to 4.53 million tonnes. Power generation surged 25% to 8.26 billion units, driving revenue from operations up 23.29% to ₹4,717 crore.

FY26 financial recap and dividend

In the previous fiscal year, NLC India posted a record profit after tax of ₹3,769 crore, marking a 38.91% rise YoY. The company’s EBITDA reached an all-time high of ₹7,475 crore, up 14.78% from the previous year. Capital expenditure also hit a record high of ₹9,131 crore, reflecting aggressive capacity addition.

The Board recommended a final dividend of ₹0.25 per share (2.5%), supplementing the interim dividend of ₹3.60 per share (36%) paid earlier. The total dividend for FY26 amounts to ₹533.86 crore, equivalent to 38.5% of paid-up share capital.

Capacity expansion and strategic diversification

NLC India has set a long-term target of achieving 20 GW of power generation capacity by 2047. During FY26, the group added more than 1 GW of generating capacity, including the third unit of Ghatampur Thermal Power Project (GTPP). The renewable energy portfolio reached 1,785 MW after commissioning 353 MW of new capacity.

The company is also expanding into critical minerals, with letter of intent received for Vanadium, Titanium, and Aluminous Laterite blocks in Telangana. Collaboration with KABIL and IREL continues as part of this diversification strategy.

What the numbers show

A divergence exists between the top-line acceleration and profit growth in Q1FY27. While revenue expanded by 23.29%, PBT grew only 9.76%. This gap suggests that despite higher volumes and power generation, operating costs or other expenses likely absorbed a significant portion of the incremental revenue, moderating bottom-line expansion compared to the robust sales growth.

Key highlights

• Q1FY27 revenue rose 23.29% to ₹4,717 crore
• Q1FY27 PBT increased 9.76% to ₹652 crore
• FY26 PAT was ₹3,769 crore, up 38.91% YoY
• Total dividend for FY26 set at 38.5%
• Group capacity reached 8.4 GW in Q1FY27