Power Grid (Buy)

Target: ₹375

CMP: ₹281.25

Power Grid (PWGR)’s Q3-FY25 reported standalone (SA) PAT was in line at ₹3,890 crore (-2 per cent y-o-y). On a consolidated basis, reported PAT was down 4 per cent at ₹3,860 crore. In 3QFY25, its JVs reported a loss of ₹5.1 crore, significantly improving from ₹104.60 crore loss in Q2-FY25.

In the earnings call: FY25 capex guidance was raised to ₹23,000 crore (from ₹20,000 crore), capex and capitalisation for FY26 was guided at ₹28,000-30,000 crore, while the same for FY27 was guided at ₹35,000 crore, management guided that the dividend payout may see some moderation given mounting capex. :

Of the current order book of ₹1.43 lakh crore, about 33 per cent is attributable to RTM projects, where the company earns a healthy 15 per cent ROE. Additionally, the board approved an investment of ₹370 crore for the 400kV Vindhyachal PS – Sasan D/C Line at Hindalco Switchyard, scheduled for commissioning by Dec’26.

Following the Q3-FY25 results, we moderate our DPS estimates to ₹9/₹10/ ₹13.5 for FY25/FY26/FY27. Power Grid has declared a second interim dividend of ₹3.25 a share for FY25. We reiterate our Buy rating on the stock with a TP of ₹375 based on 3.4x Dec-26 BVPS.