Power Grid Corporation of India (PGCIL) is expected to announce its third-quarter earnings on February 3. According to an average of five brokerages, the government-owned company is expected to report a 1.3 percent decline in revenue on an annualised basis to around Rs 11,386 crore.
Net profit for the quarter is estimated to see muted growth of around 0.6 percent from the same quarter of the previous year to Rs 3,946 crore, while earnings before interest, taxes, depreciation and amortisation or EBITDA margin for the three-month period is estimated to be around 87 percent.
The most optimistic of the brokerages is Elara Capital, which estimates net profit to increase 4.8 percent on-year to Rs 4,221 crore, and the most pessimistic is Mirae Asset Sharekhan, which estimates net profit will decline by 0.3 percent from a year earlier to Rs 3,958, although the expect it to increase 6.7 percent on a sequential basis.
PGCIL is a central public sector undertaking (CPSU) under the Ministry of Power, dealing in power transmission as well as telecom and consultancy. Its stock price has risen around 14 percent in the last one year and around 190 percent over the last five years.
What will drive earnings? Most brokerages estimate PowerGrid to report a flattish quarter on the back of reduced power demand and weak capitalisation.
Transmission demand
Analysts at Antique Broking expect a moderate quarter for the company. According to them, the company estimates interstate transmission opportunities to be Rs 1.36 lakh crore till FY32. The total transmission opportunities are estimated at around Rs 1.9 lakh crore.
Regulated equity
Analysts at Elara Capital expect regulated equity to increase to Rs Rs 8,790 crore in the three months to December 2024 on commissioning of new transmission lines and substations.
Weak capitalisation
Motilal Oswal analysts add that while the adjusted profit after tax for the quarter may grow by a modest annual 2 percent, it could improve in coming years as capex and capitalisation are likely to pick up strongly.
Power demand
Antique Broking notes that after a strong 11 percent growth in the first quarter of the fiscal due to extreme climatic conditions, power demand has been flattish in the last two quarters on a year-on-year basis. As on November 30, 2024, all-India installed capacity stood at 457 GW and the country added 15 GW in the first eight months of the current financial year.
What to watch out for
Most brokerages are in agreement that the most looked-for event is any announcement with regard to orders and capex.
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