Sharekhan's research report on Power Grid Corporation of India
Q3FY23 standalone PAT grew by 10.5% y-o-y to Rs. 3,702 crore (above estimate) led by higher dividend income and lower tax rate of 7.9%, which offset muted asset capitalization. Standalone/consolidated asset capitalisation was muted at Rs. 2,866 crore/Rs. 5,190 crore; down 78%/72% y-o-y in 9MFY23. Q4FY23 asset capitalisation is likely to be robust given full-year guidance of Rs. 10,000-12,000 crore (lower than earlier guidance of Rs. 13,000 crore). Overall receivables continue to increase and stood at Rs. 9234 crore, up 36% q-o-q. Management guided for FY24 capex/asset capitalisation of Rs. 8,800 crore/Rs. 10,000 crore but expects upside to these number given strong Rs. 40,000-50,000 crore of transmission bid pipeline. Asset monetisation delays are disappointing, but the management hinted at maintaining dividend payout ratio of 60%. Power Grid has projects worth Rs. 47,600 crore.
Outlook
We maintain a Buy on Power Grid with an unchanged PT of Rs. 265 as valuation of 1.6x/1.4x FY24E/FY25E P/BV seems attractive given expectation of 10% PAT CAGR over FY22-25E, RoE of 18% and a dividend yield of ~6-7%.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!