Power Grid Q4 Results Review - Transmission Pie Is Getting Bigger: ICICI Securities

ICICI Securities Report

Transmission capital expenditure is set to double in next six years. We estimate interstate transmission assets at Rs 3 trillion; India is likely to spend another Rs 3 trillion by FY30E to evacuate the renewables. Power Grid Corporation of India Ltd. is the natural beneficiary of this capex.

95% of the existing Power Grid assets are operating on a regulated basis. Incrementally, new assets are being built on bidding basis. Power Grid has been winning major share in new transmission assets. It has won Rs 2770 billion of new assets in FY24.

As a result, its capital expenditure is likely to pick up to Rs 250 billion by FY26E. However, its stock price has run up sharply recently; we resume coverage on the stock with Add rating and target price of Rs 345 per share.

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