Prabhudas Lilladher's research report on Power GridPower Grid Corporation of India (PWG) reported sales growth of 24% YoY to Rs54bn (PLe: Rs52bn). Revenues from Transmission segment was up 24% to Rs52.4bn, while Consultancy and Telecom were up 4% and 46%, respectively. EBITDA was up 28% YoY to Rs47.9bn (PLe: Rs45.5bn). EBITDA margin came in at 88.7%, up 280bps YoY, aided by 40bps YoY reduction in personal cost. PAT was up 31% YoY to Rs16.1bn (PLe: Rs15.5bn). The stock is trading at a valuation of P/B of 1.5x FY17E PER of 9.8x FY17E earnings. We expect the stock to deliver Sales and PAT CAGR of 17% & 20%, respectively, over FY15‐17E. Increasing asset base and healthy pace of capitalization should also help elevate concerns of equity dilution. We maintain ‘BUY’ on the stock. For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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