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Informist, Thursday, Jan. 30, 2025

 

By Anand JC

 

MUMBAI – Power Grid Corp. of India Ltd. is expected to report another quarter of flat bottom line growth on Monday, analysts said. When the company reports its December quarter earnings on Monday, its plans for capital expenditure and capitalisation will be keenly monitored.

 

The state-owned electric utility major is anticipated to report a net profit of INR 39.61 billion for the latest quarter, largely unchanged from the same quarter a year ago, as per an average of estimates from six analysts. Sequentially, its net profit may increase around 7%. The blue-chip company currently owns and operates over 85% of India's inter-regional and interstate electricity transmission network assets. 

 

Kotak Institutional Equities expects Power Grid to report a "weak" growth in profit after tax, which is reflective of its modest capitalisation on an expanded asset base, it said in a report. Capitalisation of assets means the assets which were part of the company's expansion plan have now started contributing to its overall revenues.

 

The company's net sales are seen expanding nearly 7% on year to INR 114.17 billion for the reporting quarter, according to a consensus of six brokerages' views. Sequentially, the top line could increase about 11%. 

 

Currently, it has guided for a capital expenditure and capitalisation of INR 180 billion for the ongoing financial year. After the September quarter earnings, Power Grid revised its capital expenditure and capitalisation target for 2026-27 (Apr-Mar) to INR 400 billion from 250 billion earlier. It also has a project pipeline of INR 2 trillion for the next 7–8 years.

 

Analysts expect Power Grid to report earnings before interest, taxes, depreciation, and amortisation of INR 101.10 billion for the December quarter, flat on-year and just over 1% sequentially, as per an average of estimates from five brokerages. 

 

Power Grid's regulated equity in the September quarter was around INR 880 billion-INR 900 billion, the company had informed investors during a conference call. Regulated equity is regular, assured income earned by utility companies from the Central Electricity Regulatory Commission, giving them cash flow certainty. Elara Securities expects Power Grid's regulated equity for the December quarter to be INR 879 billion, driven by the commissioning of new transmission lines and sub-stations.

 

On Thursday, shares of Power Grid closed at INR 295.35 on the National Stock Exchange, up 2.6%. Since the disclosure of its September quarter earnings Nov. 6, shares of the company have depreciated 7.4%.

 

Following are the Oct-Dec consolidated earnings estimates for Power Grid Corp. of India based on reports from six brokerage firms in the descending order by estimate of net profit:

 

Brokerages	Net sales (in INR mln)	Net profit (in INR mln)	EBITDA (in INR mln)
Elara Securities (India) Pvt Ltd	1,20,501.00	42,213.00	1,06,598.00
Nuvama Wealth Management Ltd	1,09,855.00	40,342.00	96,650.00
Motilal Oswal Financial Services Ltd	1,14,348.00	39,619.00	98,965.00
Sharekhan Ltd	1,08,000.00	39,580.00
Kotak Institutional Equities	1,15,933.00	39,346.00	1,02,405.00
JM Financial Institutional Securities Pvt Ltd	1,16,386.00	36,578.00	1,00,890.00
Average	1,14,170.50	39,613.00	1,01,101.60

 

End

 

Edited by Tanima Banerjee

 

 

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