Power Grid Corporation of India (PGCIL) reported steady set of 3QFY20 earnings which were broadly in-line with our estimates. PAT for the quarter came in at Rs27bn against PLe of Rs25bn on account of higher other income and lower effective tax rate of 23% compared to 39% in 3QFY19. Capex /Capitalisation came in at Rs39.5/52bn during the quarter. Management has maintained its capitalisation guidance of Rs220-250bn, subject to commissioning the Raipur-Pugalur line. On YTD basis, the company has won projects worth Rs610bn of which TBCB accounts for Rs130bn which augurs well for the future growth. The company won Rs2.9bn orders in 3QFY20 mainly comprising of TBCB projects and has a strong visibility over next two-three years on the back of Rs660bn orders in hand and strong upcoming opportunity from Renewable (GEC). We expect PGCIL to deliver 13% earnings growth over FY19-21E.
OutlookThe stock is trading reasonable valuations of 1.6x/1.5x FY20/21E P/BV. We maintain our Buy rating with TP of Rs224.
For all recommendations report, click hereDisclaimer: 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.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
Read More
