Buy Power Grid Corp; target of Rs 170: Angel

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26 Aug, 2025 12:21

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 Angel Broking's report on Power Grid Corporation of India (PGCIL)

"Power Grid Corporation of India (PGCIL) is among the largest transmission utilities in the world and is one of the best plays on the power sector in India owing to its assured ROE model and strong earnings visibility. Huge investments lined up for augmenting power generation and transmission capacities: Power generation capacity in the country is expected to increase to ~318GW by the end of the XII plan and a further addition of ~110GW has been planned during the XIII plan. The transmission sector is also expected to see huge investments of ~Rs 1,80,000cr and ~Rs 2,00,000cr during the XII and XIII plan, respectively. A majority of these investments are expected to be towards inter-regional transmission."

"Led by the strong capex plans and a healthy capitalisation rate, we expect PGCIL to report a top-line and bottom-line CAGR of ~15% and ~17% over FY2014-17E. At the current market price of Rs 147, the stock trades at a P/B of 1.8x and 1.7x its FY2016E and FY2017E BV of Rs 79.7 and Rs 88.7, respectively. We initiate coverage on the stock with a Buy recommendation and a target price of Rs 170, based on ~1.9x FY2017E book value, implying a 16% upside from the current levels", says Angel Broking research report.

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