Power Grid Corporation of India is likely to post muted Q4 results, with revenue and profits falling from a high base year ago. The company is set to announce its Q4FY24 earnings on May 22.
For Q4FY24, Power Grid Corp may report a revenue of Rs 10,594 crore, down 18 percent year-on-year, according to Bloomberg consensus estimate of five brokerages. The company’s net profit is seen at Rs 4,160 crore, falling 3.7 percent from that a year ago, showed estimates.
Also read: Power Grid Corporation of India: What is supporting the stock price
Currently, market sentiment on Power Grid shares is mixed: 11 brokerages have a ‘buy’ rating, while 7 have ‘sell’ calls, and 3 have ‘hold’ calls on the stock.
Nuvama, in its post-Q3 earnings report, downgraded the stock from 'hold' to 'reduce.' Despite a 52 percent rise in the stock price over the past six months, Nuvama forecasts only a 6-7 percent EPS CAGR through FY24-28 due to high base and 2-4 years gestation period for new projects.
Many brokerages are optimistic about Power Grid due to transmission opportunities, though Nuvama highlights risks such as a slower order book and increased competition from competitive bidding. In May 2024, Nikhil Nigania of Bernstein noted the power industry’s multi-year capital expenditure cycle, naming Power Grid a top pick due to India's strong transmission network.
Goldman Sachs sees a 2 percent earnings CAGR through FY23-26, with a 3 percent regulated equity CAGR and a 20 percent profit CAGR from auction-won projects.
JM Financial, in February 2024, projected Rs 1.9 lakh crore in capex opportunities for Power Grid by 2032, including ISTS and international projects. They also foresee Rs 17,000-crore allocation for solar, smart metering, and data centers over the next 7-8 years.
Elara Capital, in February 2024, noted that Power Grid's capex has bottomed out; however, the brokerage anticipates sustained growth with new government guidance.
Power Grid shares have risen 78.79 percent in the past year and 202.60 percent over five years. As of May 18, the stock was at Rs 316, up 1.2 percent. Power Grid, a CPSU under the Ministry of Power, transmits electricity through its EHVAC and HVDC network.
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