Powergrid Infra. — Q3 FY26 earnings call

Call held 10 Feb 2026

Management summary

PGInvIT reported a strong Q3 FY26 with a total consolidated income of ₹3,249 million and a net distributable cash flow (NDCF) of INR2,614 million. The trust declared a distribution of ₹3 per unit, reaffirming its commitment to ₹12 per unit for FY26. While actively pursuing new acquisition opportunities, management highlighted the challenge of limited near-term asset availability and the potential for revenue decline from existing SPVs in FY27-28, underscoring the need for continuous growth.

Highlights

  • Total consolidated income of ₹3,249 million for Q3 FY26.

  • Net distributable cash flow (NDCF) of INR2,614 million for Q3 FY26.

  • Declared a distribution of ₹3 per unit for Q3 FY26, contributing to a cumulative ₹50.51 billion distributed since listing.

  • Maintained high operational performance with average availability across all SPVs exceeding 99.75%.

  • Secured in-principle approval for a consortium with POWERGRID to participate in TBCB projects up to ₹500 crores.

Concerns

  • Acknowledged limited availability of transmission assets for acquisition in the near term.

  • Visibility of revenue decline from FY27-28 for some existing SPVs, potentially impacting distribution sustainability without new acquisitions.

  • Limited scope for cost-cutting initiatives to offset potential revenue declines due to already high EBITDA margins.

Key financials

  1. Total Consolidated Income 3,249 Mn
  2. Revenue from Operations 3,167 Mn
  3. Other Income 82 Mn
  4. Total Expenses 1,177 Mn
  5. NDCF 2,614 Mn

What they filed

Q1 FY27: revenue down 9.8%, net profit down 10.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue223 265 219 245 225 +1%249 −6%234 +7%221 −10%
EBITDA191 263 1,312 241 222 +16%246 −6%160 −88%217 −10%
Net profit180 252 1,292 223 205 +14%228 −10%143 −89%200 −10%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

medium confidence

Pipeline

other

Consortium with POWERGRID to participate up to two TBCB projects with aggregate project cost of around INR500 crores.

Management is pursuing a new pathway for value-accretive growth by considering participation in the development of transmission projects under tariff-based competitive bidding (TBCB) mechanism.

Source: Prepared remarks

Capital allocation

high confidence
  • Debt Gross ₹10,661 Mn
    • New borrowing Loan raised from HDFC Bank in December 2024 to fund acquisitions, with a prevailing interest rate of 6.75%. ₹5,060 Mn
    PGInvIT's outstanding external borrowing stood at ₹10,661 million. That includes ₹5,756 million loan raised from HDFC Bank in March 2022 and ₹5,060 million loan again raised from HDFC Bank in December 2024 to fund acquisitions. Both facilities are floated rate loans with one linked to the 3 months treasury bill and other to the repo rate. The prevailing interest rates on these loans currently stand at 6.56% and 6.75%, respectively. Our net borrowing ratio stands at 5.22%, providing significant headroom to fund future acquisition entirely through debt.
  • Dividend ₹3/share (interim)
    Yesterday, on February 9, 2026, PGInvIT announced its financial results and quarterly distribution for the period ended December 31, 2025. The results, together with the investor presentation have been made available on the stock exchange platforms and also on our website for the benefit of investors and the public at large.

Guidance & targets

Dividend

  • Distribution per unit Dividend · FY26 · High confidence ₹12
    We reiterate our commitment to a 12 per unit distribution for the full fiscal year 2026.

    — Naveen Srivastava

Investment Pipeline

  • Aggregate project cost for TBCB projects Investment Pipeline · near future · Medium confidence ₹500 crores
    In this context, the Board of Investment Manager of PGInvIT and POWERGRID has granted in principle approval for formation of a consortium with POWERGRID as a lead partner and PGInvIT as the other partner to participate up to two TBCB projects with aggregate project cost of around INR500 crores.

    — Naveen Srivastava

What to watch in Q4 FY26

Progress on POWERGRID consortium for TBCB projects

Next quarter / near future
Current In principle approval, working on modalities and agreement finalization for projects up to ₹500 crores.
Target Submission of bids for TBCB projects or further updates on project finalization.

Why it matters

This new growth pathway is crucial for future asset additions and maintaining distribution sustainability amidst declining revenues from existing assets.

in principle, approval POWERGRID has given, and we see that we are working on the modalities and finalization of agreement. And in parallel, we see that projects will be approximately 74% will be from Power Grid side and 74% from PGInvIT and 26% from Power Grid.

Risks & concerns

  • Limited availability of transmission assets for acquisition

    high

    Management consistently communicated the challenge of limited near-term acquisition opportunities for operational transmission assets, impacting growth prospects.

    Management acknowledged

  • Decline in revenue from existing SPVs in FY27-28

    high

    Based on the tariff pattern of SPVs, there is a visibility of revenue decline from FY27-28, which could impact NDCF and distribution if not offset by new acquisitions.

    Management acknowledged

  • Sustainability of ₹12 distribution per unit without new asset additions

    high

    An analyst raised concern that without new asset additions, the current ₹12 distribution might not be sustainable due to anticipated declining revenues and increasing costs.

    Analyst acknowledged

Q&A highlights

3 direct, 1 evasive
Distribution for FY27 and FY28 Evasive
At present, we are working on '26. And as we have committed that we'll give you INR12, as we are doing in a same manner. And I'm sure that when the '27 will come, we'll surely declare that at that time.

Analysts are seeking clarity on future distribution beyond the current FY26 commitment, especially given potential revenue declines from existing assets.

Asked by Palash Jain

State asset monetization plan details Partial
State monetization, we are in touch with the states. And we see that like see, you can understand that in ISTS, it's a limited acquisition opportunity... We anticipate the procedure may take time to materialize, but we are on the job.

This is a new potential growth avenue for acquisitions, and investors are looking for concrete progress and specifics on which states are involved.

Asked by Palash Jain

Progress on consortium with POWERGRID for TBCB projects Partial
in principle, approval POWERGRID has given, and we see that we are working on the modalities and finalization of agreement. And in parallel, we see that projects will be approximately 74% will be from Power Grid side and 74% from PGInvIT and 26% from Power Grid.

This is a key part of the new growth strategy to acquire assets, and investors want to know if bids have been placed and the timeline for execution.

Asked by Vipulkumar A Shah

Impact on distribution if no new assets are added Partial
We see that based on the tariff pattern of SPV outlined in the final offer documents, there is a visibility of decline of revenue from '27-'28. But we are sure that by putting it this way as we are going in monetization or we are acquiring some assets or in this consortium, we'll see that we'll move further.

Directly addresses the sustainability of the ₹12 distribution per unit in the face of anticipated declining revenues from existing assets without new acquisitions.

Asked by Vipulkumar A Shah

Possibility of increasing dividend from ₹12 to ₹15 Direct
And secondly, as far as the dividend is concerned, I feel 12 at present we are giving you, and I'm sure it's one of the good dividend. And we have to see that our NDCF also, minimum distribution is 90% of NDCF as per SEBI guidelines, but we are giving more than 90% also. So we are giving the maximum at present.

Investors are looking for higher returns, and management clarifies the current distribution policy and the limitations on increasing it beyond the current commitment.

Asked by Thiyagarajan M

Diversification into other power generation projects (e.g., solar) Partial
the strength of our project management is the transmission business. So we intend to remain focused on the transmission projects also. But it is not mandatory that it's only transmission. We can go for other generation projects also. And we see that as we are evaluating the possibility of diversification internally.

Explores potential new growth areas beyond core transmission assets, which could provide new revenue streams and reduce reliance on a single asset class.

Asked by Thiyagarajan M

Revenue decline for some SPVs in FY28 and its impact on distribution Direct
So Vijay, when we said that the revenues are fixed, it does not mean that whatever we are getting, say, INR100, we will continue to get INR100 for x number of years. By fixed revenue, it means that whatever has been quoted at the time of bidding -- say, in the first year, I will be getting INR100, then INR90, then INR80, then maybe INR110 or whatever it is.

Clarifies the nature of 'fixed revenues' under TBCB, confirming that revenues can decline over time and necessitating new acquisitions to maintain distribution levels.

Asked by Vijay

Cost savings initiatives to offset revenue decline Direct
So Amit, if you can look at the numbers, you would see that the EBITDA margins are already very high in these projects. So with these kind of margins, the cost-cutting opportunities are bare minimum. We are we presume that we are one of the most efficient structures currently in this segment. And there is -- don't foresee any cost-saving initiative, something to adjust to the tune of INR290 crores.

Addresses whether internal efficiencies can mitigate the impact of anticipated revenue declines, with management indicating limited scope for significant cost savings.

Asked by Amit Maheshwari

2 min read 6 chapters

Detailed narrative

Q3 FY26 Financial Performance

PGInvIT reported a total consolidated income of ₹3,249 million for Q3 FY26, with revenue from operations contributing ₹3,167 million and other income ₹82 million. Total expenses for the quarter stood at ₹1,177 million, resulting in a net distributable cash flow (NDCF) of INR2,614 million. The trust maintained high operational efficiency, with average availability across all SPVs exceeding 99.75%.

Distribution and Shareholder Returns

For the quarter ended December 31, 2025, PGInvIT declared a distribution of ₹3 per unit, marking the 18th consecutive quarterly payout. This brings the cumulative distribution since listing to ₹55.50 per unit, totaling ₹50.51 billion distributed to investors against an IPO issue price of ₹100 per unit. Management reiterated its commitment to a ₹12 per unit distribution for the full fiscal year 2026.

Debt Profile and Capital Structure

As of December 31, 2025, PGInvIT's outstanding external borrowing was ₹10,661 million. This includes a ₹5,756 million loan from HDFC Bank in March 2022 and a new ₹5,060 million loan from HDFC Bank in December 2024 to fund acquisitions. The prevailing interest rates on these floated rate loans are 6.56% and 6.75%, respectively, with a net borrowing ratio of 5.22%, providing significant headroom for future debt-funded acquisitions.

Acquisition Strategy and Pipeline

PGInvIT is actively pursuing acquisition opportunities, acknowledging the near-term challenge of limited availability of transmission assets. The company has received in-principle approval to form a consortium with POWERGRID to participate in up to two tariff-based competitive bidding (TBCB) projects with an aggregate project cost of around ₹500 crores. This initiative aims to leverage the sizable pipeline of upcoming transmission projects and secure future growth.

State Asset Monetization Initiatives

The trust is engaging with various states regarding their asset monetization plans, viewing this as a potential new avenue for acquisition opportunities. A workshop organized by CEA in December 2024 saw participation from almost 20 states, indicating growing interest in monetizing transmission assets. While policy decisions and procedures may take time to materialize, PGInvIT is actively working on these opportunities.

Future Revenue Outlook and Diversification

Management noted a visibility of revenue decline from FY27-28 for some existing SPVs based on their tariff patterns, highlighting the need for continuous asset acquisitions to sustain distributions. While the primary focus remains on transmission projects, PGInvIT is evaluating the possibility of diversification into other power generation projects internally. However, management emphasized that cost-cutting opportunities are minimal due to already high EBITDA margins and efficient operations.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Power earnings calls