BENGALURU (Reuters) – State-run energy transmission company Power Grid Corp of India posted a 3.5% rise in first-quarter profit on Friday, helped by falling expenses.
Power Grid’s consolidated net profit rose to 37.24 billion Indian rupees ($444.91 million) in the quarter ended June 30, from 35.97 billion rupees a year ago.
Revenue from operations fell 0.4% to 110.06 billion rupees; however, total expenses fell 0.7%.
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KEY CONTEXT
The June quarter included an unusually severe heatwave nationwide that, according to Elara Securities, boosted the country’s base power demand by 10%. Rising power demand, increased capacity addition and foray into storage solution and green hydrogen would continue to drive growth in the utility sector, the brokerage said.
Heatwaves and an uptick in economic activity have resulted in India’s electricity generation growing at an average of about 8% annually following the pandemic year of 2020/21, outpacing power demand growth compared with every major global economy. India expects power generation to grow 9.3% to 1,900 billion kilowatt hours (kWh) during the fiscal year through March 2025.
PEER COMPARISON
Valuation (next Estimates (next 12 Analysts’ sentiment
12 months) months)
RIC PE EV/EBIT Revenue Profit Mean # of Stock to price Div
DA growth growth rating analysts target** yield
(%) (%) * (%)
Power Grid 19.27 10.10 4.20 4.77 Hold 13 1.12 3.55
Corporation
of India
Torrent 30.35 15.34 12.38 24.26 Hold 10 1.32 1.04
Power
Tata Power 29.59 13.64 12.75 22.64 Hold 20 1.17 0.47
Company
NTPC 17.04 10.45 6.41 8.09 Buy 15 0.97 2.03
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
APRIL-JUNE STOCK PERFORMANCE
— All data from LSEG IBES
— $1 = 83.7030 Indian rupees
(Reporting by Ashish Chandra in Bengaluru; Editing by Vijay Kishore)
