Power Grid’s (PWGR) 2QFY21 results highlight the strong underlying numbers in its transmission segment, implying ~16% YoY growth. Reported S/A PAT rose 23% YoY, further aided by higher other income. INR180b of awards are to be bid under various schemes; however, we are expecting some delays. In this context, a declining order book does put a risk of growth slowing down. However, valuations at 1.3x FY22E P/BV and ~7-8% FY22E dividend yield remain attractive for a company with steady RoEs of ~17%. Maintain Buy with DCF-based TP of INR222/share.
OutlookValuations at 1.3x FY22E P/BV remain attractive for a company with steady RoEs of ~17% and does not capture any growth potential (EPS FY20-23E: 7% CAGR). Maintain Buy with DCF-based TP of INR222/share.
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