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Informist, Wednesday, Jan. 28, 2026

 

By Sunil Raghu

 

AHMEDABAD – Power Grid Corp. of India Ltd. is expected to report a year-on-year growth in its top line for the December quarter, a first after a year-on-year fall in revenue for seven consecutive quarters. The rise in revenues is expected on the back of better telecom and consulting revenues, in addition to asset capitalisation, according to brokerages tracking the company. However, the company's bottom line growth could be low due to relatively weaker asset capitalisation.

 

Power Grid is expected to report a standalone net profit of nearly INR 38 billion for the December quarter, down nearly 4% on year, according to the average of estimates from six brokerages. Projections range from a low of nearly INR 32 billion by JM Financial Institutional Securities Ltd. to a high of INR 40 billion by Motilal Oswal Financial Services Ltd. JM Financial sees asset capitalisation by Power Grid in the December quarter to be "limited". Motilal Oswal expects an on-year increase in Power Grid's December quarter net profit, as capital expenditure and asset capitalisation "improve", it said.

 

Asset capitalisation is a key indicator of Power Grid's growth and expansion trajectory. This is the process of transferring completed infrastructure projects – such as transmission lines and substations – onto the company's balance sheet as fixed assets from capital work-in-progress. When the transfer is complete, the assets become operational and begin to generate revenue. 

 

The state-run company is India's biggest electric power transmission utility. It carries over 45% of the total power generated in the country. The Maharatna enterprise owns and operates around 84% of India's inter-state transmission system network, through which it transmits electricity across states. The company has set a target of capitalising assets worth INR 220 billion for 2025-26 (Apr-Mar). However, the company has lagged this target in recent years. Mirae Asset Sharekhan Ltd. does not see any major commissioning for Power Grid, which could also lead to a flat on-year net profit growth.

 

Power Grid's revenue for the reporting quarter is expected to be around INR 111 billion, which would translate to a growth of nearly 10% on year, according to the average of six estimates. Forecasts for Power Grid's top line range from a low of over INR 103 billion by Mirae Asset Sharekhan Ltd. to a high of nearly INR 121 billion by Kotak Securities Ltd, which believes that growth would be aided by better telecom and consulting revenues. Kotak expects "modest" revenue growth of 7% on year for Power Grid, owing to "weak" asset capitalisation in the trailing 12 months. It also cites an absence of net profit growth as a reflection of the low asset capitalisation throughout the year.

 

Power Grid's earnings before interest, tax, depreciation, and amortisation are expected to fall over 7% on year to over INR 93 billion, according to an average of five estimates. Power Grid's EBITDA projection of nearly INR 88 billion by Nuvama is the lowest and that of nearly INR 98 billion by Kotak Securities is the highest. Motilal Oswal expects Power Grid's EBITDA to grow 11% on year, as capital expenditure and asset capitalisation improve year-on-year, it said in its note.

 

Power Grid has set a capital expenditure target of INR 280 billion for the current financial year ending March 2026, which will go up to INR 350 billion in 2026-27 (Apr-Mar) and then to INR 450 billion in FY28, the company's top official had said in an analyst call post the September quarter earnings. The analysts would keenly watch out for the company's status on its capital expenduture.

 

Power Grid will detail its December quarter earnings Friday. Shares of Power Grid have fallen nearly 10% since it reported September quarter earnings on Nov. 3. On Wednesday, its shares closed at INR 259.80 on the National Stock Exchange, up over 2% from the previous close.

 

Of the six brokerage reports on the company available with Informist, four have a 'buy' or equivalent recommendation on the stock with an average target price of INR 341, which is over 31% higher than the current market price. One brokerage has a 'sell' recommendation with a target price of INR 238, while another has a hold call with a target price of INR 300.

 

Following are the Oct-Dec earnings estimates for Power Grid from six brokerages in descending order of the estimate of net profit in INR billion:

 

Brokerage	Net sales	Net profit	EBITDA
Motilal Oswal Financial Services Ltd.	105.51	40.23	94.23
Elara Securities (India) Pvt. Ltd.	118.54	39.84	94.91
Nuvama Wealth Management Ltd	103.63	39.32	87.79
Kotak Securities Ltd	120.65	38.38	97.61
Mirae Asset Sharekhan Ltd	103.23	35.80	--
JM Financial Institutional Securities Pvt Ltd	114.29	31.59	91.98
Average	110.97	37.53	93.30

 

End

 

Edited by Tanima Banerjee

 

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