The third-quarter standalone PAT of Power Grid (PWGR) for FY25 was reported at ₹3,890 crore, a 2% decrease year-on-year, which was in line with expectations. The consolidated PAT also saw a 4% decline to ₹3,860 crore. Notably, the company’s joint ventures reported a significant improvement in profitability, with a loss of ₹5.1 crore in Q3FY25 compared to ₹104.60 crore loss in Q2FY25.
During the earnings call, Power Grid raised its FY25 capex guidance to ₹23,000 crore from ₹20,000 crore. The company also provided guidance for FY26 and FY27 with capex and capitalization projected at ₹28,000-30,000 crore and ₹35,000 crore, respectively. Management indicated that the dividend payout might see moderation due to increased capex.
Currently, Power Grid’s order book stands at ₹1.43 lakh crore, with around 33% attributed to Return-On-Equity (ROE) projects, which yield a healthy 15% ROE. Additionally, the company’s board approved an investment of ₹370 crore for the 400kV Vindhyachal PS – Sasan D/C Line at Hindalco Switchyard, set to be commissioned by December 2026.
Following the Q3FY25 results, dividend per share (DPS) estimates have been adjusted to ₹9/₹10/ ₹13.5 for FY25/FY26/FY27. Power Grid declared a second interim dividend of ₹3.25 per share for FY25. The stock maintains a Buy rating with a target price (TP) of ₹375 based on 3.4x Dec-26 Book Value Per Share (BVPS).
The article was published on February 6, 2025.
