Power Grid Corporation of India Ltd. share price target

Q1 revenues were largely in line (refer Exhibit 1), though PAT was ahead of estimates on higher surcharge and dividend income and lower interest costs. It has done a capex of Rs31bn, while capitalization was Rs106bn, during the quarter mainly due to Raipur Pugalur HVDC line of Rs95bn getting capitalised. It has maintained its guidance for a capex of Rs105bn and capitalization of Rs200-250bn in FY21. The current CWIP Rs282bn, while work in hand is Rs410bn. As capex reduces, we believe that it can increase...

17 September 2020 We analyzed details of Power Grid (PWGR)s tariff-based competitive bidding (TBCB) projects from their annual reports. At an aggregate level, in our view, PWGR should be able to generate ~14% equity IRR (assuming a debt-to-equity commissioned TBCB projects varies in the range of 227%. TBCB currently remains small in the overall context (3% FY20 PAT; 5% gross block). However, with increased awarding at the interstate/intrastate level on a TBCB basis, its pie would eventually grow. Over the past one year, PWGR has won ~7 projects on a TBCB basis. We expect profits from TBCB projects to rise to INR7.8b in FY23 from INR3.7b as new projects get commissioned. PWGR also seeks to monetize its TBCB assets through the InvIT mode and has acquired an in-principle approval from the board and the cabinet. PWGRs eight commissioned projects account for a gross block of ~INR125b.

Power Grid recorded standalone revenue of Rs. 8,989cr in Q1FY21 (+2.1% YoY) primarily aided by growth in transmission business. Transmission revenue rose 4.6% YoY to Rs. 9,045cr, which includes Rs. 227cr worth of final tariff orders issued by CERC and Rs. 8,417cr final tariff orders not yet received by CERC for transmission assets....

Q1 revenues were in line with estimates (refer Exhibit 1), though PAT was ahead of estimates on lower interest costs. It has done a capex of Rs19bn, while capitalization was Rs12bn, during the quarter. It has guided for a capex of Rs105bn and capitalization of Rs200250bn in FY21. The current CWIP Rs363bn, while work in hand is Rs510bn. With reducing capex, we believe that dividends payouts can...

was up by 3% to Rs 3357.41 crore. The taxation was Rs 1019.68 crore (a swing of Rs 6239.58 crore from a write back of Rs 5219.90 crore in corresponding previous period) and thus the PAT was down by 72% to Rs 2337.73 crore. The regulatory income was Rs 975.74 crore (a swing of Rs 6401.1 crore from an expense of Rs 5425.36 crore in corresponding previous period). Thus the net profit after RI was up by 8% to Rs 3313.47 crore....

22 June 2020 Power Grids (PWGR) 4QFY20 results highlight steady performance in the Transmission segment. Adj. PAT increased 7% YoY even as Consultancy/ Telecom EBIT declined 7%/4% YoY. FY20 capitalization stood at INR182b given the delay in commissioning of Raigarh-Pugalur. INR230b worth awards are up for bidding under various schemes; however, we expect some delays. In this context, a declining order book does put a risk of slowdown in growth. However, valuations at 1.3x FY22E P/BV and ~8- 9% FY22E dividend yield remain attractive for a company with steady RoEs of ~17%. with a DCF-based TP of INR222/share. Adj. for prior period revenue, INR4.25b of one-off gains on tariff order and INR1.22b of one-time tax, S/A PAT grew 7% YoY to INR28.6b (5% higher than est.).

Despite impact of pandemic and economic situation, management further guided for capex of ~Rs105bn and capitalization of ~Rs200-250bn for FY21E. Power Grid Corporation of India (PGCIL) reported decent numbers amid the pandemic wherein revenue growth was driven by Transmission/ Consultancy segment (which was up 7%/3% YoY). Despite the current economic environment, Capex/Capitalization came in at Rs35.5/46.4bn in Q4. The...

Lower capex guidance implies higher FCF and thus potential for dividend hikes. We maintain our BUY rating on the stock with a target price of Rs. 223 based on 1.5x FY22E BVPS. Operational performance remains strong Standalone revenue from operations in Q3FY20 grew by 6.0% YoY to Rs. 8,992cr primarily contributed by transmission segment (more than 96% of total revenue) with revenues at Rs. 8,814cr in Q3FY20 (+6.6% YoY). Consultancy segment (around 2% of total revenue) reported revenues at Rs. 144cr (down 7.7% YoY) and revenue from...

The objective of Power Grid Corporation of India Ltd is to create a strong and vibrant national grid in the country to ensure the optimum utilization of generating resources, conservation of an eco-sensitive right of way and the flexibility to accommodate the uncertainty of generation plans. Presently, Power Grid is one of the few telecom players with a marked presence in remote areas and is providing highly...

Management has guided for capex of Rs105bn (Vs. Rs150bn in FY20E) and capitalisation of Rs150bn for FY21E. Power Grid Corporation of India (PGCIL) reported steady set of 3QFY20 earnings which were broadly in-line with our estimates. PAT for the quarter...