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    Buy Power Grid Coporation, target price Rs 222: Motilal Oswal

    Synopsis

    The brokerage awaits clarity on possible one-offs for the quarter.

    buy-sell-gettyGetty Images


    Motilal Oswal has given a buy rating to Power Grid Corporation with a target price of Rs 222. The share price moved up by 0.64 per cent from its previous close of Rs 171.40. The stock’s last traded price is 172.50.

    Investment Rationale

    The company came up with PAT which was well above the brokerage estimate. After adjusting for prior period revenue, 4QFY20 PAT came in at Rs 31.6 billion, 17 per cent higher than the brokerage estimate. However, the brokerage awaits clarity on possible one-offs for the quarter. Reported PAT stood at Rs 31.8 billion against Rs 30.5 billion in 4QFY19).

    Consultancy profit was down 6.9 per cent year on year; Telecom profit was down 4.2 per cent year on year. The company has made note of a one-time rebate of Rs 10.75 billion to discoms for Apr-May’20 bills. FY20 includes capitalization of Rs 182 billion and capex of Rs 153 billion. Final dividend is Rs 4.04/share. Total dividend was Rs 10/share for FY20.

    PowerGrid-MotilalOswalJune222020
    Source: Motilal Oswal

    Financials

    For the quarter ended March 31, 2020, the company reported consolidated sales of Rs 10148.26 crore, up 8.37 per cent from last quarter sales of Rs 9364.36 crore and up 6.43 per cent from last year's same quarter sales of Rs 9535.12 crore. The company reported net profit after tax of Rs 3265.59 crore in the latest quarter.

    Promoter/FII Holdings

    Promoters held 51.34 per cent stake in the company as of March 31, 2020 while FIIs held 26.95 per cent, DIIs 16.72 per cent and public and others 4.99 per cent.



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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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