Skip to content

    Power Grid Corporation of India Limited

    POWERGRIDGood
    Power·1 Aug 2025
    Management Summary

    Power Grid reported a solid Q1 FY26 with standalone PAT growth of 7% YoY, though consolidated numbers were dragged by ₹70 Crore EESL JV losses and higher CSR spend. CAPEX execution accelerated sharply with 51% YoY growth to ₹6,981 Crore. The company has a massive ₹1,48,000 Crore order book and outlined an aggressive CAPEX ramp to ₹45,000 Crore by FY28, driven by India's renewable energy transmission buildout.

    Highlights

    8

    • Total income of ₹11,444 Crore with EBITDA of ₹9,527 Crore in Q1 FY26

    • Standalone PAT of ₹3,653 Crore, up ~7% YoY; consolidated PAT of ₹3,631 Crore, down ~2% YoY due to ₹70 Crore JV (EESL) loss

    • CAPEX of ₹6,981 Crore in Q1 FY26 vs ₹4,615 Crore in Q1 FY25, up 51%

    • Commissioning of ₹2,800 Crore in Q1; capitalization of ₹1,800 Crore

    • Projects in hand of ₹1,48,000 Crore including ₹99,000 Crore TBCB

    • FY26 CAPEX target of ₹28,000 Crore; FY27 target ₹35,000 Crore; FY28 target ₹45,000 Crore

    • Telecom income up from ₹246 Crore to ₹289 Crore; consultancy income ₹329 Crore including ₹153 Crore from smart meters

    • ₹67,000 Crore worth projects up for grab plus ₹75,000 Crore recently approved by NCT

    Concerns

    2

    • Right of Way delays impacting commissioning targets

    • Equipment cost inflation squeezing TBCB margins

    What Changed2

    vs Q2 FY26

    Guidance items9 → 5 (-4)Q&A highlights8 → 3 (-5)

    Key financials

    Single quarter

    11 metrics
    1. 01Total Income (Consolidated)₹11,444 Cr
    2. 02EBITDA (Consolidated)₹9,527 Cr
    3. 03PAT (Consolidated)₹3,631 Cr-2%YoY
    4. 04PAT (Standalone)₹3,653 Cr+7.0%YoY
    5. 05Total Income (Standalone)₹11,257 Cr

    Segment breakdown

    Transmission
    ₹8,434 Cr Billing₹8,671 Cr Realization₹3,151 Cr Outstanding
    Telecom
    ₹289 Cr Income
    Consultancy
    ₹329 Cr Income
    List

    Guidance & targets

    5
    CategoryTargetPriority
    Capital Expenditure
    CAPEX FY26
    ₹28,000 Crore
    		High
    Capital Expenditure
    CAPEX FY27
    ₹35,000 Crore
    		High
    Capital Expenditure
    CAPEX FY28
    ₹45,000 Crore
    		Medium
    Commissioning
    Commissioning FY26
    ₹22,000 Crore
    		High
    Commissioning
    Capitalization FY27
    ₹20,000-₹25,000 Crore
    		Medium

    Risks & concerns

    6
    RiskSeverity

    Right of Way delays impacting commissioning targets

    RoW remains a big problem especially in Delhi and Haryana. New market rate compensation guidelines issued in March 2025 are helping but challenges persist. — Both acknowledged

    high

    Equipment cost inflation squeezing TBCB margins

    Transformer costs doubled in 7 years; GIS bay costs more than doubled from ₹6 Crore to ₹14-15 Crore. Only 2 suppliers per tender, limited negotiating power. — Analyst acknowledged

    high

    EESL JV losses dragging consolidated profits

    ₹70 Crore loss from EESL JV in Q1 FY26 caused 2% decline in consolidated PAT despite 7% standalone growth. — Analyst acknowledged

    medium

    Leh-Ladakh HVDC project uncertainty

    Only one bidder interested, technology feasibility concerns at 4,500-5,000m altitude. May need to switch from HVDC to more expensive AC technology. — Analyst acknowledged

    medium

    RTM revenue structural decline

    Depreciation step-down after 12 years and loan repayment reduce RTM revenue annually. Revenue could stagnate or decline without sufficient TBCB commissioning. — Management acknowledged

    medium

    Areas of Evasion(1)

    • Would not comment on relative quality of EPC contractors

    Q&A highlights

    3

    “Government of India has now issued guidelines for paying compensation as per the market rate... We are very successful in resolving issues in Maharashtra, Gujarat and to some extent in Rajasthan”

    RoW is the biggest bottleneck for commissioning targets; new market-rate compensation guidelines are a significant positive development

    1 min read5 chapters

    Detailed Narrative

    01

    Massive CAPEX Ramp Underway

    POWERGRID's CAPEX jumped 51% YoY to ₹6,981 Crore in Q1 FY26 vs ₹4,615 Crore. The company targets ₹28,000 Crore for FY26, ramping to ₹35,000 Crore in FY27 and ₹45,000 Crore in FY28. This is driven by India's NEP 2032 plan requiring ₹9 lakh crore of transmission investment, of which only ₹3 lakh crore has been awarded so far.

    02

    Order Book and Pipeline Remain Strong

    Projects in hand stand at ₹1,48,000 Crore including ₹99,000 Crore TBCB. Additionally, ₹67,000 Crore worth of projects are available for bidding (₹39,000 Crore already bid out, ₹29,000 Crore approved but not yet floated). A further ₹75,000 Crore was recently approved by NCT. Management expects ₹1 lakh crore per year of new project awards through 2030.

    03

    Commissioning Execution Improving Despite RoW Challenges

    Q1 commissioning was ₹2,800 Crore vs ₹2,400 Crore last year. The Dausa 765kV/400kV substation was commissioned in a record 8 months. However, capitalization lagged at ₹1,800 Crore as some projects await completion of all elements. FY26 commissioning target is ₹22,000 Crore (Q2: ₹3,000 Cr, Q3: ₹7,000 Cr, Q4: ₹8,000 Cr).

    04

    Telecom and Consultancy Businesses Growing

    Telecom income grew from ₹246 Crore to ₹289 Crore with first international ILD link commissioned. Consultancy income was ₹329 Crore, boosted by ₹153 Crore from new smart metering business in Gujarat. International expansion with Kenya transmission project near finalization.

    05

    HVDC Pipeline Provides Long-term Growth Visibility

    Multiple HVDC projects in pipeline: Khavda III to South Olpad (₹18,000-20,000 Crore project cost), Barmer to South Kalamb (₹28,000-30,000 Crore), Bikaner V to Begunia (6,000MW, target 2029-30), India-Sri Lanka, Paradeep-Andaman, and Imphal-Myanmar. Inter-country projects like Saudi Arabia/UAE/Oman connections will use VSC technology.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.