Sharekhan's research report on Power Grid Corporation of India
Power Grid has won 11 TBCB orders in the current quarter. Management had increased the capex guidance to Rs. 23,000 crore in FY25 from Rs. 20,000 crore previously. For FY26/FY27, guidance is of Rs. 28,000-30,000/35,000 crore respectively. Tighter CERC norms for O&M allowances and weak capitalization have affected the recent results of the company. The strong capex/capitalization expectation provides good earnings visibility for the future.
Outlook
Hence, we maintain a Buy with an unchanged PT of Rs. 350. Also, the company has a healthy RoE of 18% and a decent dividend yield of 3%. At CMP, it trades at 2.8x/2.6x its FY26/27 P/BV.
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