Detailed Narrative
FY26 Performance and Operational Excellence
POWERGRID concluded FY26 by achieving its revised Capex target of ₹35,000 crores and exceeding its initial capitalization guidance, reaching ₹22,749 crores with a target of over ₹25,000 crores by month-end. The company's Gross Fixed Assets now stand at over ₹3,00,000 crores. Operational performance remained strong with a transmission system availability of 99.84% and a low tripping rate of 0.25 trippings per line, demonstrating high reliability.
Future Capex and Capitalization Outlook
The company has laid out an ambitious capital expenditure plan, committing ₹37,000 crores for FY27 and projecting ₹45,000 crores for FY28. Corresponding capitalization targets are ₹30,000 crores for FY27 and ₹35,000 crores for FY28, aiming for approximately ₹65,000 crores in total capitalization over the next two years. This aggressive guidance is based on current projects in hand, with potential for upward revision if more projects are secured.
Addressing Execution Challenges
Management acknowledged past execution challenges related to Right-of-Way (RoW), skilled manpower, and equipment supply. They highlighted successful mitigation strategies, including revised government guidelines for RoW compensation, dedicated RoW cells, and an annual training program for 1400-1500 technicians/fitters. Equipment supply issues are also being addressed by manufacturers augmenting their capacities, leading to confidence in meeting new project timelines of 30-36 months.
Long-term Transmission Opportunity and Growth Visibility
POWERGRID foresees a substantial long-term transmission opportunity, driven by India's energy transition and increasing electricity demand. The CEA guidelines project a ₹7.9 lakh crore opportunity by 2035-36 within India. Including international HVDC interconnections and Brahmaputra Basin projects, the total transmission investment visibility could reach ₹15 lakh crore. The company expects to execute projects worth approximately ₹60,000 crores annually up to 2035.
Strategic SPV Mergers for Governance
To enhance administrative control and governance, POWERGRID has received MCA approval to merge 19 SPVs into 2 and is actively pursuing the merger of 28 wholly-owned subsidiaries into another 2, with Board approval already secured. This initiative aims to reduce the number of entities and streamline operations, with ongoing discussions with DIPAM to potentially increase the project limit per SPV to ₹10,000-15,000 crores, facilitating further consolidation.
Project Pipeline and Bidding Landscape
The company's current 'works in hand' stand at ₹1,48,000 crores, which includes ₹49,000 crores in Capital Work in Progress (CWIP). While the Leh Pang project has been temporarily excluded due to its fluid status, POWERGRID anticipates significant bidding opportunities for Brahmaputra basin projects and One Sun, One World, One Grid initiatives (with Oman, UAE, Saudi Arabia) to emerge within the next 2-3 years, contributing to future growth.
Competition in Niche Segments
POWERGRID noted that it faces intense competition from smaller players in intrastate and battery energy storage projects, making it challenging to secure bids in these evolving segments. The company is actively reviewing its strategies and exploring potential tie-ups with battery suppliers to enhance its competitiveness and market share in these areas.