Upcoming Webinar :Register now for 'ULIP as an investment during economic recovery' powered by Bajaj Allianz

Buy Power Grid Corporation Of India: Target Of Rs 220: Sharekhan

Sharekhan is bullish on Power Grid Corporation of India recommended buy rating on the stock with a target price of Rs 220 in its research report dated November 12, 2020.

Nov 15, 2020 / 11:31 AM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Sharekhan's research repor on Power Grid Corporation of India


Power Grid’s Q2FY2021 PAT grew by 23.4% y-o-y to Rs. 3,117 crore, which was in-line with our estimate of Rs. 3,093 crore. Strong growth was driven by higher capitalisation at Rs. 11,877 crore in H1FY2021 (versus. Rs. 5,687 crore in H1FY20), higher other income, and lower tax rate. Management reiterated its asset capitalisation and capex guidance of Rs. 20,000 crore-25,000 crore and Rs. 10,500 crore, respectively, for FY2021E. Work in hands at Rs. 41,000 crore provides earnings visibility (expect an 11% PAT CAGR over FY2020-FY2023E). Power Grid targets to monetise 5 TBCB assets worth Rs. 7,164 crore in FY2021, which would help unlock value, while potential reduction in receivables (through power sector liquidity scheme) would improve balance sheet.


Outlook


Hence, we recommend Buy on Power Grid with a PT of Rs. 220, given earnings visibility over FY2021E-FY2023E, attractive valuation of 1.2x FY2023E P/BV (31% discount to historical P/BV), and healthy dividend yield at 4%.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Nov 15, 2020 11:31 am

stay updated

Get Daily News on your Browser
Sections