Power Grid Corporation of India Limited — Q4 FY25 earnings call

Call held 21 May 2025

Management summary

POWERGRID delivered a strong FY25 with record CAPEX of ₹26,255 Crore and massive TBCB wins of ₹92,000 Crore. However, capitalization significantly missed guidance at ₹9,014 Crore vs ₹16,000-17,000 Crore target, primarily due to RoW challenges. Management guided aggressive CAPEX ramp to ₹28,000-30,000 Crore in FY26 and ₹45,000 Crore by FY28, with capitalization expected at ₹23,000-25,000 Crore in FY26.

Highlights

  • FY25 standalone income of ₹46,325 Crore with PAT of ₹15,354 Crore; consolidated income ₹47,459 Crore, PAT ₹15,521 Crore

  • Q4 standalone income ₹12,482 Crore, PAT ₹4,336 Crore; consolidated income ₹12,591 Crore, PAT ₹4,143 Crore

  • CAPEX of ₹26,255 Crore in FY25, surpassing ₹20,000 Crore target; 5-year CAGR of 23.5%

  • Capitalization of ₹9,014 Crore vs ₹7,618 Crore YoY, but missed ₹16,000-17,000 Crore target due to RoW delays

  • Won 24 TBCB projects worth ₹92,000 Crore in FY25 with 57% market share

  • Works in hand of ₹1,54,680 Crore; business outlook 2032 of ₹3,06,600 Crore

  • Telecom income crossed ₹1,000 Crore milestone at ₹1,128 Crore (vs ₹910 Crore YoY); consultancy revenue ₹799 Crore (vs ₹553 Crore)

  • EPS ₹16.69; book value ₹99.63; D/E ratio 59:41; RONW 16.75%

Concerns

  • Capitalization consistently missing guidance

Key financials

4 periods

Headline

  • CAPEX FY25
    ₹26,255 Cr
  • Capitalization FY25
    ₹9,014 Cr
    YoY +18%
  • EPS
    16.69 Rs per share
  • Net Worth
    ₹92,663 Cr
  • Gross Fixed Assets
    ₹2.91L Cr
  • Debt
    ₹1.31L Cr

Q4

  • Income (Standalone)
    ₹12,482 Cr
  • PAT (Standalone)
    ₹4,336 Cr

Consolidated, FY25

  • Total Income
    ₹47,459 Cr
  • PAT
    ₹15,521 Cr

Standalone, FY25

  • Total Income
    ₹46,325 Cr
  • PAT
    ₹15,354 Cr

What they filed

Q1 FY27: revenue up 2.7%, net profit down 0.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue11,278 11,233 12,275 11,196 11,476 +2%12,395 +10%11,666 −5%11,497 +3%
EBITDA9,597 9,533 10,194 9,102 9,055 −6%10,607 +11%5,303 −48%9,430 +4%
Net profit3,793 3,862 4,143 3,631 3,566 −6%4,185 +8%4,546 +10%3,598 −1%
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.

Segment breakdown

  • Transmission
    ₹36,877 Cr Billing FY25₹38,284 Cr Realization FY25
  • Telecom
    ₹1,128 Cr Income FY25
  • Consultancy
    ₹799 Cr Revenue FY25

Guidance & targets

Capital Expenditure

  • CAPEX FY26 Capital Expenditure · FY26 · High confidence ₹28,000-30,000 Crore
    we are targeting INR 28,000 crores in financial year '25-'26... it is likely to increase to more than INR 30,000 crores

    — R.K. Tyagi

  • CAPEX FY27 Capital Expenditure · FY27 · High confidence ₹35,000 Crore
    In financial year '26-'27, INR 35,000 crores

    — R.K. Tyagi

  • CAPEX FY28 Capital Expenditure · FY28 · Medium confidence ₹45,000 Crore
    Financial year '27-'28, INR 45,000 crores

    — R.K. Tyagi

Capitalization

  • Capitalization FY26 Capitalization · FY26 · High confidence ₹23,000-25,000 Crore
    In financial year 2025-26, we are expecting about INR 23,000 crores to INR 25,000 crores capitalization

    — R.K. Tyagi

Returns

  • TBCB ROE threshold Returns · Ongoing · High confidence Above 12-13%
    we are not going below a certain level that we have fixed a particular level that where maybe more than 12% or 13% ROE

    — R.K. Tyagi

Dividends

  • Dividend per share Dividends · FY26 · Medium confidence May reduce further from ₹9

    Previously ₹10.5 → May reduce further from ₹9

    next year also, there may be some change from INR 9. It can further reduce depending on the capex

    — R.K. Tyagi

Risks & concerns

  • Capitalization consistently missing guidance

    high

    FY25 capitalization was ₹9,014 Crore vs ₹16,000-17,000 Crore target. Q4 alone was guided at ₹11,000 Crore but missed significantly. RoW, supply issues, and skilled manpower cited as reasons.

    Analyst acknowledged

  • Declining bid pipeline visibility for FY26

    medium

    Visible pipeline of ₹46,000 Crore for FY26 vs ₹92,000 Crore wins in FY25. Management says more will emerge in 2-3 months.

    Analyst downplayed

  • ROE dilution from equity retention for capex

    medium

    ROE dipped 100bps at consolidated level. Net worth grew faster than profits. Dividend cut from ₹10.5 to ₹9, may reduce further.

    Analyst acknowledged

  • Leh-Ladakh HVDC technology and execution risks

    medium

    No worldwide experience at 4,500-5,000m altitude. Single bidder with concerns. Expected award in Q2 but has been repeatedly delayed.

    Both acknowledged

  • Equipment supply chain tightness

    medium

    Huge demand for transformers, GIS, conductors. Bulk procurement strategy adopted to mitigate, but supply constraints impacting timelines.

    Management acknowledged

Areas of evasion (2)

  • Intra-state TBCB project sizes not shared
  • Exact HVDC capex breakdown deferred

Q&A highlights

2 direct
Capitalization miss and RoW challenges Direct
there are challenges of ROW and supply issues and skill manpower... in 2025-26, execution will be much faster as compared to FY 2024-25

FY25 capitalization was only ₹9,014 Crore vs ₹16,000-17,000 Crore guidance, a major miss that impacts near-term revenue growth

Asked by Sumit Kishore

TBCB bid pipeline significantly lower than FY25 Partial
INR 45,000 crore to INR 46,000 crore... This is as of now, but more projects are in pipeline, visibility of those projects will be seen after maybe 2, 3 months

Current visible pipeline of ₹46,000 Crore is half of FY25's ₹92,000 Crore wins, though management expects it to increase

Asked by Sumit Kishore

Cost overruns on TBCB projects due to RoW compensation changes Direct
we are likely to get these claims under change of law because, as on date, when we got these projects, we were adopting the compensation policies issued in October 2015

Management confident cost overruns from RoW compensation increases will be recoverable via change-of-law claims, protecting margins

Asked by Puneet

1 min read 5 chapters

Detailed narrative

Record CAPEX and TBCB Wins But Capitalization Disappointment

POWERGRID achieved record CAPEX of ₹26,255 Crore in FY25, exceeding the ₹20,000 Crore target. Won 24 TBCB projects worth ₹92,000 Crore with 57% market share. However, capitalization at ₹9,014 Crore significantly missed the ₹16,000-17,000 Crore guidance due to RoW delays in Rajasthan, Haryana, Delhi, and Gujarat. FY26 capitalization guided at ₹23,000-25,000 Crore.

Massive Business Pipeline Through 2032

Works in hand stand at ₹1,54,680 Crore including ₹1,05,000 Crore TBCB. Business outlook 2032 is ₹3,06,600 Crore (₹2,70,000 Crore ISTS, balance in other businesses). NEP 2032 envisions ₹9-10 lakh crore in transmission, with only ₹3 lakh crore awarded so far, implying ₹6 lakh crore remaining to be bid by 2029-30.

Telecom and Consultancy Hitting New Milestones

Telecom segment crossed ₹1,000 Crore income for the first time at ₹1,128 Crore (vs ₹910 Crore), adding 75 new customers. Data centers being built at Manesar and Chennai. Consultancy revenue grew 44% to ₹799 Crore with 55 new domestic orders and 8 international orders.

RoW Compensation Policy Evolution Creating Near-term Pain

Government of India changed RoW land compensation from 15% to 30% (June 2024), tower base from 85% to 200%. In March 2025, further revised to 60% urban/45% semi-urban with market rate pricing. These changes caused delays as states adopted new policies. Management expects claims under change-of-law to recover additional costs.

HVDC Project Pipeline Provides Multi-year Growth Visibility

Key HVDC projects: Leh-Kaithal (₹20,000+ Crore, Q2 award expected), Khavda-South Olpad (RFP out, VSC-based), Barmer-Maharashtra (LCC), Kurnool-Vizag (LCC). International projects include India-Singapore via Andaman (₹30,000+ Crore, 2,000MW), India-Sri Lanka, and India-Myanmar. One Sun One World One Grid connecting to UAE/Oman/Saudi Arabia on VSC technology.

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