Power Grid Corporation of India is expected to see a modest rise in earnings for the first quarter of 2025-26, supported by steady capitalisation activity but tempered by higher finance costs and subdued power demand. The average of three brokerages pegs the state-owned bulk power transmission company's net profit for the first three months of the current fiscal at Rs 3,808 crore, compared to Rs 3724 crore a year earlier, with gains limited due to a 13 percent increase in interest costs. According to a Moneycontrol poll, revenue is projected to come in at Rs 11,202 crore, up 1.3 percent from the Rs 11,062 crore seen in Q1FY25. The company will be reporting its numbers on June 30.
Currently, there is limited earnings coverage for Power Grid. Of three brokerages, Elara is the most optimistic, forecasting a net profit of Rs 3,913 crore, while Motilal Oswal is the most cautious, pegging it at Rs 3,688 crore. EBITDA (earnings before interest, taxes, depreciation and amortisation) margin is seen holding steady at around 87 percent, supported by the company’s regulated business model.
Key drivers
Steady capitalisation
Capitalisation of completed transmission assets should drive turnover growth in the quarter. JM Financial said, “Moderate growth in revenue is anticipated, largely driven by increased capitalisation.”
Higher finance costs
Despite a stable revenue performance, profitability could remain under pressure due to rising borrowing costs. Brokerages expect net profit to stay largely flat year-on-year, as higher interest expenses offset operating gains.
Renewable energy projects
A sharp increase in renewable power additions of around 6.7 GW in just two months continues to support the long-term outlook for transmission infrastructure. Elara Capital highlighted, “Power Grid is a key beneficiary of renewable capacity expansion, backed by a Rs 2 trillion (Rs 2 lakh crore) project pipeline over the next 7–8 years.” While the impact in this quarter may be limited, the structural growth trend is intact.
Weak power demand
India’s overall power generation declined 2 percent year-on-year in Q1FY26, mainly due to lower output from conventional sources. Motilal Oswal noted, “While current demand remains soft, peak demand months have historically shown great variability, and power demand could bounce back in the coming quarters.” In the near term, however, muted demand could limit upside, brokerages suggest.
What analysts will be watching for
Analysts will be closely tracking any management commentary on upcoming capex plans, project execution timelines and expectations around power demand for the rest of FY26.
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