Buy Power Grid Corporation of India; target of Rs 360: Sharekhan

Sharekhan's research report on Power Grid Corporation of India

Standalone PAT was down 1% y-o-y to Rs. 4,128 crore due to a one-time benefit in the prior period and high regulatory deferral expense in the current quarter. Consolidated asset capex/capitalization was Rs. 12,500/7,618 crore in FY24. Asset capitalization lagged the growth in the capex for the year. Management guided for capex and asset capitalization of Rs. 15,000 crore each in FY25. Also, company estimates Rs. 2,07,000 crore of capex till 2032 on the conservative side. The strong capex expectation provides good earnings visibility for the future with a chance of upside in the estimates.

Outlook

Hence, we maintain a Buy with a revised PT of Rs. 360. Also, the company has a healthy RoE of 19% and a dividend yield of 3%. At CMP, it trades at 2.9x its FY26 P/BV.

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