Power Grid Q1: Rs 7,000-crore capex, Rs 1.9 lakh crore pipeline, and push into BESS, hydrogen, global projects

The company confirmed it will continue to focus on tariff-based competitive bidding (TBCB) projects, which are expected to account for 85 to 90 percent of execution going forward

Power Grid Corporation of India Ltd (PGCIL) latest earnings announcement for the first quarter of FY26 showed aggressive capital expenditure and deeper bets on India’s green energy backbone. It commissioned critical RE evacuation assets and outlining a three-year Rs 1.05 lakh crore investment roadmap across transmission, energy storage, green hydrogen, and global projects.

The state-run transmission major incurred a Q1FY26 capex of Rs 6,981 crore, a sharp 51 percent jump over last year’s Rs 4,615 crore. It targets Rs 28,000 crore for FY26, with commissioning guidance of Rs 22,000 crore, and projects capex of Rs 35,000 crore in FY27 and Rs 45,000 crore in FY28 — a sign of confidence in execution momentum and visibility.

So far this year, projects worth Rs 2,800 crore have been commissioned, while asset capitalisation stood at Rs 1,800 crore. Some large stations — including Khavda 2 and Khavda 3, pivotal to renewable evacuation — are partly operational but awaiting final linkage elements for full capitalisation.

The company now has Rs1.48 lakh crore in projects in hand, including Rs 99,000 crore under TBCB. With Rs 41,000 crore in work-in-progress assets, the effective executable book is near Rs 1.9 lakh crore. An additional Rs 67,000 crore worth of projects are expected to be bid out within FY26, and a broader Rs 5.5 to 6 lakh crore pipeline is expected over five years, in line with the NEP 2032 plan.

TBCB Dominates, HVDC Gathers Steam

The company confirmed it will continue to focus on tariff-based competitive bidding (TBCB) projects, which are expected to account for 85 to 90 percent of execution going forward. Major HVDC links are in various stages, including:
Khavda KPS 3–South Olpad (VSC-based HVDC) – bid submitted; ~Rs 18,000–20,000 crore project
Barmer–South Kalam (LCC-based HVDC) – expected bidding in 2 to 3 months

Bikaner 5–Bagunia HVDC, India–Sri Lanka HVDC, Paradip–Andaman link, and Imphal–Myanmar back-to-back HVDC are in pipeline

The company is looking at inter-country HVDC projects using VSC tech due to long distances. South Kalam–Barmer alone could cost up to Rs 30,000 crore.

Beyond transmission, Power Grid is actively entering green hydrogen and battery energy storage systems (BESS):

It is executing a green hydrogen pilot at Neemrana, using solar-powered electrolysis. Hydrogen will be stored and converted back to electricity at night.

The company plans to bid in a 2,000 MW/4,000 MWh BESS tender in Rajasthan, aiming to become a large player in the segment over 2–3 years.

It has already commissioned an 85 MW solar plant at Nagda, and rooftop solar installations are planned across all Power Grid buildings by December 2025.

PGCIL is also close to signing its first international transmission project in Kenya, a 400kV and 220kV system. The management mentioned that the agreement is at final approval stage and likely to be signed this month.

Overcoming RoW and Supply Chain Bottlenecks

Right-of-way (RoW) continues to be a top challenge, though new government guidelines to pay compensation at market rates — instead of circle rates — are easing bottlenecks in states like Gujarat and Maharashtra. Delhi and Haryana still face unresolved issues.

To ease project delays, the company has set up a dedicated women's RoW cell, and is exploring mobile tower cranes and drones for cement transportation and stringing.
“We are also procuring transformers in bulk — even before winning projects — to preempt supply constraints,” the management stated. He flagged a 10 to 20 percent annual inflation in costs of key equipment like transformers and GIS bays, citing a shortage of credible suppliers.

Financials: Profit Steady, Telecom, Smart Metering Add Buzz

Standalone net profit rose 7 percent YoY to Rs 3,653 crore, while consolidated profit dipped 2 percent due to a Rs 70 crore loss from JV ESL and a Rs 70 crore YoY rise in CSR spend. Total consolidated income stood at Rs 11,444 crore. Telecom and consultancy businesses continued to expand:
Telecom revenue rose to Rs 289 crore, with 100 percent backbone availability and expansion to 500 cities.

Consultancy income stood at Rs 329 crore, with Rs 153 crore from smart metering in Gujarat
The company is also participating in new smart metering tenders under consultancy contracts
PGCIL has no near-term fundraising worries, with internal accruals sufficient to meet equity needs (~Rs 7,000 to 8,000 crore annually). It continues to enjoy AAA-equivalent ratings and borrows at sub-7 percent rates.