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Buy Power Grid Corporation of India; target of Rs 265: Sharekhan

Sharekhan is bullish on Power Grid Corporation of India has recommended buy rating on the stock with a target price of Rs 265 in its research report dated September 30, 2022.

October 01, 2022 / 03:27 PM IST
The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

 
 
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Sharekhan's research report on Power Grid Corporation of India


Large investment opportunity of up to Rs. 1,24,148 crore in interstate power transmission system (ISTS) over FY23-27 given the capex for RE capacity expansion and sharp rise in works in hand to Rs. 52,000 crore (including Leh-Kaithal project worth Rs. 26,000 crore) provide scope for pick-up in Power Grid’s capex from FY24 and could re-rate the stock. Exploring non-transmission opportunities (has set-up PowerGrid Energy Services) in power sector like energy management, smart meters, smart grid, energy storage would diversify earnings stream and create value in the long term. Asset monetization target of Rs. 6,600 crore for FY23 and no REC takeover plan would mean sustained high dividend payout of ~60% (based on FY22) and dividend yield of 6-7%.


Outlook


Media reports indicate that the Power ministry has recently rejected the proposal for REC’s takeover by Power Grid. This removes overhang of investment in unrelated business and focus shifts to Power Grid’s strong earnings visibility given regulated RoE model. We maintain Buy on Power Grid with an unchanged PT of Rs. 265 as stock price correction of 15% from 52-week high and attractive valuation of 1.6x FY24E P/BV provides investment opportunity.


More Info


At 17:30 Power Grid Corporation of India was quoting at Rs 212.15, up Rs 3.65, or 1.75 percent.


It has touched an intraday high of Rs 218.60 and an intraday low of Rs 207.45.


It was trading with volumes of 1,699,878 shares, compared to its thirty day average of 901,239 shares, an increase of 88.62 percent.


In the previous trading session, the share closed up 0.34 percent or Rs 0.70 at Rs 208.50.


The share touched its 52-week high Rs 248.25 and 52-week low Rs 180.30 on 10 May, 2022 and 12 November, 2021, respectively.


Currently, it is trading 14.54 percent below its 52-week high and 17.67 percent above its 52-week low.


Market capitalisation stands at Rs 147,984.23 crore.


For all recommendations report, click here


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Power Grid Corporation of India - 011022 - khan

Broker Research
first published: Oct 1, 2022 03:25 pm