Buy Power Grid Corporation of India; target of Rs 350: Sharekhan

Sharekhan's research report on Power Grid Corporation of India

Consol. PAT of Rs. 4,143 crore was flat y-o-y while the standalone PAT of Rs. 4,336 crore was up 5% y-o-y led by higher other income. Tighter CERC norms and weak capitalization affected the performance. Capitalization of Rs. 9,014 crore in FY25 was less than the guidance of Rs. 18,000 crore. Company expects it to spill over in FY26 and has given a guidance of Rs. 23,000-25,000 crore for the year. Capex of Rs. Rs. 26,000 crore in FY25 was higher than expectation. Management has given a guidance of capex of Rs. 28,000/35,000/45,000 crore in FY26/27/28 respectively.

Outlook

The strong capex expectation provides good earnings visibility for the future. Hence, we maintain a Buy with an unchanged PT of Rs. 350. At CMP, it trades at 2.7x/2.5x its FY26/27 P/BV.

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Power Grid Corporation of India - 23052025 - khan