Feb 15, 2017 12:27 PM IST | Source: Moneycontrol.com
Buy Power Grid Corporation; target of Rs 238: Motilal Oswal
Motilal Oswal is bullish on Power Grid Corporation has recommended buy rating on the stock with a target price of Rs 238 in its research report dated February 12, 2017.
Motilal Oswal's research report on Power Grid Corporation
Power Grid (PWGR) 3QFY17 standalone adj. PAT increased 20% YoY to INR 19.3b. Spike in wage bill by INR 576m QoQ, largely due to change in actuarial calculations, explains the deviation w.r.t estimates. Capitalization and capex during the quarter was in-line at INR 69.2b (est. INR 70b) and INR 51.7b.
We remain bullish on investment in transmission sector due to (1) huge potential for energy demand growth in India (2) rising share of renewables (3) decades of underinvestment in T&D (4) integration of national grid has made low cost energy accessible to everyone (5) potential from SAARC countries. Yet, we are building conservatively 6.3% earnings growth over 10 years after FY22E in DCF value. PWGR has competitive advantage due to strong execution and balance sheet. We re-iterate Buy.
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