Buy Power Grid Corporation; target of Rs 230: Dolat Capital Market

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26 Aug, 2025 12:21

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Dolat Capital Market's research report on Power Grid Corporation

Q1 revenues were largely in line (refer Exhibit 1), though PAT was ahead of estimates on higher surcharge and dividend income and lower interest costs. It has done a capex of Rs31bn, while capitalization was Rs106bn, during the quarter mainly due to Raipur Pugalur HVDC line of Rs95bn getting capitalised. It has maintained its guidance for a capex of Rs105bn and capitalization of Rs200-250bn in FY21. The current CWIP Rs282bn, while work in hand is Rs410bn. As capex reduces, we believe that it can increase dividend payouts going forward. FY20 payout was at 54%, giving a dividend yield of ~5%.

Outlook

We maintain our estimates in FY21 and continue to maintain our Buy rating with a TP of Rs230, valuing it at 1.6 P/BV on FY22E.

For all recommendations report, click here

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