PowerGrid Research Report

Company Overview

PowerGrid (PWGR), a leading transmission company, hosted an analyst meet to update investors on its execution progress and substantial pipeline opportunities.

Key Takeaways

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• Management has raised FY26 capex/capitalization guidance to INR350b/INR250b, up from the previously guided INR320b/INR220b in February 2026.
• The Central Electricity Authority (CEA)'s transmission plan for renewable energy integration outlines a pipeline of INR7.9 trillion till FY36.
• Including incremental opportunities, the overall addressable pipeline expands to approximately INR15 trillion, with PowerGrid estimated to have a 50% share.
• This translates into a long-term bid pipeline of approximately INR6–7.5 trillion (INR600 billion annually), providing a multi-year structural tailwind.

Execution Progress

• Execution momentum in the country has picked up sharply, with transmission line/transformation capacity additions beating targets by 56%/71% in January-February 2026.
• A robust HVDC pipeline is emerging, with the Bikaner-Begunia and Barmer-South Kalamb projects expected to be awarded in the near to medium term.

Financial Implications

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• Rising capex commitments are expected to weigh on shareholder returns, with DPS expected to remain flat or witness a modest cut.

Valuation and Recommendation

• We value PowerGrid based on December 2027 Book Value Per Share (BVPS) and a Price-to-Book (P/B) multiple of 2.5x.
• We reiterate our Neutral rating and set a target price of INR302 for PowerGrid based on December 2027 BVPS and a P/B multiple of 2.5x (unchanged).