Buy Power Grid Corporation of India; target of Rs 240: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss' research report on Power Grid Corporation of India

Power Grid Corporation of India’s (PGCIL) Q4FY18 operating performance came 5% below consensus, primarily due to INR2.5bn foreign exchange rate variation (FERV), though was P&L neutral. Key highlights: 1) FY18 capitalisation at INR274bn dipped 12% YoY & marginally missed lower end of management’s INR280bn guidance; 2) with INR940bn projects in hand, management has pegged next three years’ capitalisation at ~INR300bn plus on an average (our estimate: INR260bn for FY19/20), which we believe is aggressive considering ~INR250bn capex. We believe, regulated equity is still likely to post healthy 13% CAGR over FY18-20. There could be some time correction in the stock due to finalisation of CERC’s 2019-24 norms’ overhang.

Outlook

Maintain ‘BUY’ with revised TP of INR240 (INR250 earlier) building in higher COE due to high risk-free rate.

For all recommendations report, click here

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