Power Grid Q3FY26 preview: Modest earnings growth expected amid weak asset capitalisation

Elara Capital suggests that Power Grid remains a key beneficiary of renewable energy capacity additions and continues to be the government’s preferred execution partner for high-value and strategically important transmission projects.

• Power Grid Q3FY26 revenue seen up 5.2 percent YoY to Rs 11,866.5 crore
• Net profit expected to rise marginally by 0.5 percent YoY to Rs 3,883 crore
• Capex visibility remains strong with Rs 280 billion earmarked for FY26

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Power Grid Corporation of India (PWGR) is expected to report modest earnings growth in Q3FY26, as weak asset capitalisation over the past few quarters continues to weigh on performance, even as regulated equity expansion and steady execution offer some support, according to brokerages. The power company will announce its results on January 30.

According to a Moneycontrol Poll of brokerages, Power Grid Corporation of India’s Q3FY26 revenue is estimated to increase 5.2 percent year-on-year to Rs 11,866.5 crore. Net Profit is expected to rise marginally by 0.5 percent YoY to Rs 3,883 crore from Rs 3,862 crore in the corresponding quarter last year. EBITDA margin is estimated at 82 percent, lower than 85 percent reported in Q3FY25.

Among brokerages, Antique is the most optimistic with net profit of around Rs 3,912 crore and JM Financial is the most pessimistic at Rs 3,524 crore.

Here are the key drivers for earnings:

Revenue growth to remain moderate

Revenue growth for the quarter is expected to remain modest at 4–7 percent YoY, primarily due to limited transmission asset capitalisation in the trailing twelve months, say analysts. Kotak Institutional Equities expects revenue growth of about 7 percent YoY, aided partly by better contribution from telecom and consultancy businesses, which could help offset the impact of lower capitalization. Meanwhile, Motilal Oswal estimates standalone revenue at around Rs 10,600 crore, implying 4 percent YoY and 6 percent QoQ growth.

Renewable Energy provides opportunities

Elara Capital suggests that Power Grid remains a key beneficiary of renewable energy capacity additions and continues to be the government’s preferred execution partner for high-value and strategically important transmission projects.

Profitability to stay under pressure

Profitability is likely to remain constrained, reflecting the subdued pace of capitalization, according to Antique. The brokerage notes that PAT growth was largely absent in FY25 due to tightening norms on operation and maintenance (O&M). For FY26, however, it expects improvement in profitability, with PAT growth of 4–5 percent for the full year. For Q3FY26, Antique expects capitalisation of around Rs 4,000 crore, resulting in a 3 percent increase in regulated equity and PAT growth of about 3 percent YoY on a consolidated basis.

Kotak Institutional Equities expects flat PAT growth, reflecting weak asset capitalization through most of the year. Motilal Oswal, however, expects some recovery, with EBITDA growth of about 11 percent YoY and adjusted PAT rising around 4 percent YoY, supported by gradual improvement in capex execution.

Capex visibility and execution pipeline remain strong

Despite near-term moderation, brokerages remain constructive on Power Grid’s medium-term capex and execution outlook. Elara Capital notes that the company has earmarked capex of Rs 28,000 crore for FY26, with capitalisation guidance revised down to Rs 20,000 crore due to right-of-way challenges.

Elara highlights that Power Grid has guided for higher capex of Rs 350 billion in FY27 and Rs 450 billion in FY28, backed by a robust work-in-hand of Rs 1.52 trillion. This includes ongoing and new regulated projects worth Rs 46,600 crore and tariff-based competitive bidding (TBCB) projects of about Rs 1.03 trillion. The brokerage expects revenue and PAT growth of 6 percent and 3 percent YoY, respectively, in Q3FY26.

What analysts will be watching for

Key monitorables for the quarter include the pace of asset capitalization, movement in the TBCB bidding pipeline and progress on large strategic projects.