Power Grid Corporation of India LtdQ3 FY23
Power Grid Corporation of India Ltd Q3 FY23 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹290P/E: 17.9Market Cap: ₹2.8L CrSector: Power
Management growth scorecard
Revenue
Category 3
Margin
Category 3
Fundraise
N/A
Order
N/A
Capex
Yes
1 of 3 growth signals are positive — mixed outlook.
Full analysisRevenue guidance
Category 3- →PowerGrid aims for strong future growth driven by increasing CapEx, with a target rising from ₹10,000 crores in current fiscal to around ₹12,500 crores in FY25, potentially higher if bigger projects like HVDC are won.
- →Capitalization is expected to jump from around ₹10,000 crores this year (₹4,000 crores already done) to about ₹17,000 crores next year.
- →Operational availability remains robust above 99.75%, supporting steady performance.
- →Transmission bidding pipeline is active with ₹60,000 crores expected over 12-18 months, and execution timelines of 24-30 months.
- →Significant opportunities arise from renewable energy (RE) related transmission assets and international projects targeting Africa and neighboring countries.
- →Data center business and smart metering infrastructure (₹15,000 crores over 10 years) represent additional growth avenues.
- →Overall outlook is bright with multiple large projects in the pipeline promising strong sales/revenue expansion.
Margin guidance
Category 3- →PowerGrid expects continued operational stability with availability above 99.75%, supporting consistent earnings.
- →CapEx is projected to increase significantly, from about ₹10,000 crores in the current fiscal to over ₹15,000-17,000 crores next year, indicating growth opportunities.
- →Capitalization targets are expected to rise, with ₹12,500 crores projected for FY25, potentially higher with HVDC project wins.
- →The company’s regulated equity stands around ₹82,000 crores, supporting steady return on equity (~15.5%).
- →Transmission and consultancy income are stable, with telecom income growing modestly.
- →There is no explicit guidance on EPS, but stable PAT growth is indicated with 4-5% quarter-on-quarter growth recently.
- →The outlook is bright with multiple projects in the pipeline, supporting medium to long-term profit and earnings growth.
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Fundraise plans
- →There is no explicit mention of any immediate or planned new fundraising through equity or debt in the provided excerpts.
- →The company’s current Debt: Equity ratio is improving, standing at 58:42, indicative of active debt management but no new issuance stated.
- →Equity infusion is primarily in transmission businesses and TBCB projects, with accumulated equity investment of about ₹4,100 crores in TBCB.
- →No explicit discussion on issuing new equity or raising fresh debt was noted.
- →CapEx targets for FY24 (~₹10,000 crores) and FY25 (~₹12,500 crores and higher if bigger projects are won) are funded presumably through existing financial resources.
- →Discussion on asset monetization via PowerGrid InvIT is ongoing but involves stake transfers rather than new fundraising.
- →Overall, focus appears on project bidding, asset capitalization, and monetization, rather than fresh fundraising.
Order book
- →Current order book stands at approximately ₹2.57 lakh crores (standalone) and ₹2.73 lakh crores (consolidated).
- →Capital Work-in-Progress is around ₹15,000 crores.
- →Bidding pipeline includes:
- → - Around ₹67,000 crores approved and pending for bidding.
- → - Another ₹45,000 crores in initial planning stages.
- →In calendar year 2023, approximately 25-26 projects have been bid out, with about 14 projects won so far.
- →Typical bidding timelines range from 12 to 18 months.
- →Execution timelines for awarded projects vary between 24 to 30 months, with some complex projects like HVDC taking longer.
- →CapEx target for FY24 is ₹10,000 crores, projected to increase to ₹12,500 crores in FY25, potentially higher with new projects.
- →Capitalization target is ₹10,000 crores for current year and around ₹17,000 crores for next year.
Capex plans
Yes- →Current fiscal year CapEx target: ~10,000 crores (already 4,000 crores capitalized).
- →FY25 CapEx projection: around 12,500 crores, potentially higher if big HVDC projects are won.
- →Capitalization target: ~10,000 crores for current year; for FY25 projected around 17,000 crores.
- →Cumulative CapEx for 11 TBCB projects: 8,500 to 9,000 crores; plus five more projects ~11,000 crores.
- →Total CapEx under hand including TBCB and RTM projects: around 50,000 crores, excluding intra-state projects.
- →CapEx outlook for next 9 years: estimated ~1,80,000 crores including RE related transmission.
- →Additional investments planned in data centers through a PowerGrid subsidiary, starting with a hyperscale data center in Manesar.
- →Consideration of international projects including connectivity studies with Sri Lanka.
- →TBCB equity investment till date ~4,100 crores.
- →Focus remains on transmission businesses; limited equity in telecom and consultancy.
How does Power Grid Corporation of India Ltd rank vs peers in Power?
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