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    Power Grid Corporation of India Limited

    POWERGRIDGood
    Power·5 Feb 2025
    Management Summary

    POWERGRID delivered exceptionally strong CAPEX execution in Q3 with 122% YoY growth to ₹7,649 Crore, bringing 9M CAPEX to ₹17,651 Crore. Project wins continued apace with ₹63,909 Crore in 9M. However, consolidated profits were impacted by EESL JV losses (₹140 Crore) and CERC tariff order impacts (~₹140 Crore/quarter). FY25 capitalization target of ₹18,000 Crore appeared ambitious with only ₹7,423 Crore done in 9M.

    Highlights

    8

    • Q3 standalone income ₹11,609 Crore, PAT ₹3,894 Crore; consolidated income ₹11,743 Crore, PAT ₹3,862 Crore

    • 9M FY25 standalone income ₹33,843 Crore, PAT ₹11,017 Crore; consolidated ₹34,869 Crore, PAT ₹11,379 Crore

    • Q3 CAPEX ₹7,649 Crore vs ₹3,444 Crore YoY (122% growth); 9M CAPEX ₹17,651 Crore vs ₹7,690 Crore YoY (130% growth)

    • Q3 capitalization ₹3,417 Crore vs ₹1,784 Crore YoY; 9M capitalization ₹7,423 Crore vs ₹5,780 Crore

    • Won 7 TBCB projects in Q3 worth ₹19,828 Crore; 9M wins ₹63,909 Crore with 50% tariff share

    • Works in hand ₹1,43,749 Crore (₹1,47,000 Crore including latest Karnataka win of ₹3,500 Crore)

    • FY25 CAPEX target revised to ₹23,000 Crore; FY26 guided at ₹28,000-30,000 Crore

    • EESL JV losses of ₹140 Crore in 9M; CERC tariff O&M impact of ~₹450 Crore for 9M

    Concerns

    1

    • Ambitious Q4 capitalization target of ₹10,000+ Crore

    What Changed1

    vs Q4 FY25

    Guidance items6 → 5 (-1)
    Key financials

    Metrics

    13

    Periods

    3

    Headline

    3
    • Net Worth
      ₹91,620 Cr
    • Gross Fixed Assets
      ₹2.89L Cr
    • Debt
      ₹1.29L Cr

    Q3

    5
    • Income (Standalone)
      ₹11,609 Cr
    • PAT (Standalone)
      ₹3,894 Cr
    • Income (Consolidated)
      ₹11,743 Cr
    • PAT (Consolidated)
      ₹3,862 Cr
    • CAPEX
      ₹7,649 Cr
      YoY+122%

    9M

    5
    • Income (Consolidated)
      ₹34,869 Cr
    • PAT (Consolidated)
      ₹11,379 Cr
    • EBITDA (Consolidated)
      ₹30,148 Cr
    • CAPEX
      ₹17,651 Cr
      YoY+130%
    • EPS
      12.23 Rs per share

    Segment breakdown

    Transmission
    ₹32,368 Cr 9M Charges (Consol)₹27,989 Cr 9M Billing
    Telecom
    ₹722 Cr 9M Income
    Consultancy
    ₹427 Cr 9M Income
    List

    Guidance & targets

    5
    CategoryTargetPriority
    Capitalization
    FY25 Capitalization
    ₹18,000 Crore
    		Medium
    Capitalization
    Annual Capitalization next 3 years
    ₹25,000-35,000 Crore per year
    		Medium
    Capital Expenditure
    FY25 CAPEX
    ₹23,000 Crore
    		High
    Capital Expenditure
    FY26 CAPEX
    ₹28,000-30,000 Crore
    		High
    Dividends
    FY25 Dividend
    ~₹9 per share
    		High

    Risks & concerns

    6
    RiskSeverity

    Ambitious Q4 capitalization target of ₹10,000+ Crore

    9M capitalization was ₹7,423 Crore; targeting ₹18,000 Crore for FY25 implies ₹10,500+ Crore in Q4 alone. Multiple projects in advanced stages but RoW risks persist. — Analyst acknowledged

    high

    EESL JV continuing losses

    EESL JV contributed ₹140 Crore loss in 9M FY25. Management has stopped further equity infusion but losses continue to drag consolidated profits. — Analyst acknowledged

    medium

    CERC tariff O&M normative impact

    New CERC FY25-29 tariff regulations causing ~₹140 Crore/quarter O&M expense impact (~₹450 Crore for 9M), reducing profits. — Analyst acknowledged

    medium

    Dividend trajectory declining

    Dividend expected at ~₹9 for FY25 vs ₹10.5 in FY24, with further reductions possible as CAPEX ramps up. Management trying to balance growth vs shareholder returns. — Analyst acknowledged

    medium

    PG InvIT stranded without growth path

    NMP guidelines prevent permanent asset transfer; GST on revenue rights transfer makes it unviable. InvIT trading below IPO price with no clear growth path. — Analyst acknowledged

    low

    Areas of Evasion(1)

    • Tried to redirect InvIT questions to separate entity

    Q&A highlights

    3

    “Narela station is almost ready... Khavda-II and Khavda-III, KPS2 and KPS3... put together, we are expecting that around ₹10,000 crore assets are likely to be completed by March”

    Detailed project-by-project breakdown showing ₹10,000 Crore Q4 capitalization is ambitious but management has specific visibility

    asked by Anuj Upadhyay

    1 min read5 chapters

    Detailed Narrative

    01

    CAPEX Execution Accelerating Dramatically

    Q3 CAPEX surged 122% YoY to ₹7,649 Crore, bringing 9M total to ₹17,651 Crore (130% YoY growth). FY25 target is ₹23,000 Crore with ₹19,480 Crore already spent through January. This sharp acceleration reflects the massive TBCB project wins being executed. FY26 CAPEX guided at ₹28,000-30,000 Crore, with FY27 at ₹35,000+ Crore.

    02

    Project Wins Continue but Bid Pipeline Questions Emerge

    Won ₹63,909 Crore worth of projects in 9M FY25 with 50% tariff market share. ₹52,000 Crore projects under bidding with expected 50% strike rate. NEP envisions ₹9.16 lakh crore total transmission CAPEX by 2032, with only ₹3 lakh crore awarded so far. However, visible FY26 pipeline appears smaller than FY25's record pace.

    03

    Profit Headwinds from EESL, CERC, and One-offs

    Consolidated profits impacted by EESL JV losses (₹140 Crore in 9M), CERC tariff O&M impact (~₹140 Crore/quarter), and lower one-time📎 items vs prior year. The structural RTM revenue decline of ₹700-900 Crore annually continues. Management noted they've stopped further equity infusion into EESL.

    04

    Dividend Declining as Growth CAPEX Takes Priority

    FY25 dividend guided at ~₹9 per share vs ₹10.5 in FY24. With CAPEX doubling from ₹12,500 Crore to ₹23,000 Crore and further ramp ahead, management signaled dividends may continue declining. TBCB projects require 20% equity; regulated projects 30%. Annual equity need of ₹5,000-6,000 Crore at current CAPEX levels.

    05

    HVDC Projects Progress Despite Challenges

    Khavda-Nagpur (₹35,000 Crore) awarded to Hitachi with work started. Leh-Pang (₹20,000+ Crore) VSC project facing technology challenges at 4,500-5,000m altitude; expected award in Q1 FY26. KPS3 to South Olpad (₹12,000 Crore NCT) under bidding. Additional HVDC projects from Rajasthan-Maharashtra and Andhra Pradesh in pipeline.

    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.