For 2QFY2016, Power Grid Corporation of India (PWGR) reported a 16.8% yoy increase in transmission revenues to Rs4,708cr, which is 3.5% below our estimate of Rs4,878cr, on account of lower than expected capitalisation. For the quarter, capitalisation stood at Rs5,053cr, well below our estimate of Rs6,246cr. Capitalisation was expected to remain strong on account of spill-over in the commissioning of certain projects from 1QFY2016 to 2QFY2016 and the commissioning of the Biswanath Chariyali Agra transmission line in 2QFY2016. The company incurred a capex of Rs5,088cr during the quarter, which is higher than our estimate of Rs4,850cr. We reduce our FY2016 capitalisation estimate to Rs21,991cr, as against Rs22,257cr earlier. Lower operating expenses as a percentage of revenues and higher consultancy income helped the company in improving its EBITDA margin by 188bp yoy to 87.8%. In terms of operating performance, the impact of lower than expected revenue was partially offset by operating efficiencies, with transmission and employee expenses coming in lower than expected. The EBITDA came in at Rs4,318cr, as against our estimate of Rs4,368cr. Outlook and valuation We have reduced our estimates marginally to factor in the lower-than-expected capitalisation in 2QFY2016. We expect PWGR to report a revenue and EBITDA CAGR...