Power Grid Corporation of India Ltd Research Report - 31st Jan 2016

Power | Published on Jan 29th 2016


For 3QFY2016, Power Grid Corporation of India (PWGR) reported a strong 23% yoy increase in transmission revenues to `5,143cr (5.5% ahead of our estimate of `4,925cr), on account of higher than expected capitalisation. Capitalisation for the quarter stood at `17,207cr, led by the commissioning of the Biswanath Chariyali – Agra HVDC transmission line. Even on exclusion of this line, total capitalisation stood at ~`9,000cr, well ahead of our expectation of `5,126cr. Capex incurred during the quarter, at `5,368cr, was also ahead of our estimate of `4,882cr. We raise our FY2016 capitalisation estimate to ~`32,850cr, as against ~`22,000cr earlier. Increased operating efficiency and higher capitalisation helped the company in improving its EBITDA margin by 213bp yoy to 88.7%. The EBITDA for the quarter came in at `4,797cr as against our estimate of `4,482cr. The Management maintained its capex guidance of `22,500cr and `22,550cr for FY2016 and FY2017, respectively. Outlook and valuation We raise our estimates marginally to factor in the higher-than-expected capitalisation in 3QFY2016. We expect PWGR to report a revenue CAGR of ~17% (vs 16% earlier) and the EBITDA to grow at a CAGR of 19% (vs 16% earlier) over FY2015-17E. At the current market price of `148, the stock trades at a P/BV of 1.8x and 1.6x its FY2016E and FY2017E BV of `82 and `92, respectively. We retain our target price of `165 on the stock, based on ~1.8x FY2017E P/BV, implying a 12% upside from the current levels and have an Accumulate rating on the stock.

Download Full Report


CMP 148
Target Price 165
Investment Period12 Months

Stock Info

MCAP BSE (Rs in Cr)Array
MCAP NSE (Rs in Cr)Array
P/E (x)Array
EPS (Rs.)Array
BV (Rs.)Array
Div Yield (%)Array
FV (Rs.)Array
P/BV (x)Array
EV/Sales (x)Array
EV/EBITDA (x)Array

Shareholding Pattern (%)

Public & Others4.0
Grand Total100.0

Trade Securely


Portfolio Tracking & Trading Application View Demo