(Reuters) -Power Grid Corporation of India posted a nearly 6% fall in second-quarter profit due to higher expenses and delayed project awards and execution.
The state-run energy transmission company’s consolidated net profit fell to 35.66 billion rupees ($405.7 million) in the quarter ended September 30.
Total expenses rose 5.8% to 77.33 billion rupees, while revenue from operations inched up 1.8% to 114.76 billion rupees.
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KEY CONTEXT
India’s power generation rebounded in the second quarter, driven by a pickup in economic momentum following a sluggish performance in the April–June period, according to Elara Capital analysts.
The recovery began in July and gained pace in August, when power output surged 4% year-on-year—the fastest growth in five months—fueled by a rise in manufacturing activity amid strong demand. The upward trend continued in September, with a 3.2% increase in electricity production.
However, India’s clean energy sector continues to face setbacks due to delays in transmission projects, leading to weak demand for tenders, delays in signing power agreements and project cancellations.
The state-run power transmission major’s revenue from its transmission business, which accounts for most of its total revenue, fell 4.2% in the quarter.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 months) Analysts’ sentiment
months)
RIC PE EV/EBITDA Revenue Profit growth Mean No. of Stock to price Div yield
growth (%) (%) rating* analysts target** (%)
Power Grid Corporation of 15.73 9.03 7.34 6.70 Buy 16 0.91 3.12
India
Tata Power Company 25.64 12.15 10.73 13.98 Hold 20 1.01 0.56
Torrent Power 23.51 11.19 9.82 3.75 Hold 10 1.01 1.44
NTPC 13.53 8.84 6.48 5.33 Buy 18 0.80 2.55
* Mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** Ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JULY-SEPTEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 87.8950 Indian rupees
(Reporting by Anuran Sadhu and Abhirami G in Bengaluru; Editing by Ronojoy Mazumdar and Janane Venkatraman)
