1. At a Glance
India’s largest power transmission company—Power Grid—moves 50% of all electricity generated in the country. With 85%+ EBITDA margins and a dividend yield that makes FDs cry, this Maharatna might not be flashy, but boy is it steady.
2. Introduction with Hook
Imagine a boring engineer who wears tucked-in shirts, eats parathas for lunch, and still manages ₹15,500 Cr profit. That’s Power Grid. While the world swoons over EVs and green tech, this PSU quietly lays down the wires that make it all possible.
- Market cap: ₹2.75 lakh Cr
- OPM: 85% (yes, really)
- Dividend Yield: 3.8%
- Promoter holding: 51.3% (GoI)
This isn’t a stock. It’s a power-backed FDR with equity upside.
3. Business Model (WTF Do They Even Do?)
Power Grid is the Indian government’s favorite logistics partner—but for electricity.
Core Biz:
- Interstate Power Transmission (95%+ of revenue)
- Telecom Infra (Tower leasing, Fiber optics)
- Consultancy (Govt projects, international bids)
TL;DR:
They don’t generate electricity, they transport it. Think of them as the Indian Railways of electrons.
4. Financials Overview
| Metric | FY25 | FY24 | FY23 |
|---|---|---|---|
| Sales | ₹45,792 Cr | ₹45,843 Cr | ₹45,603 Cr |
| Net Profit | ₹15,521 Cr | ₹15,573 Cr | ₹15,420 Cr |
| OPM | 85% | 87% | 87% |
| ROE | 17.3% | 17.5% | 17.8% |
| Dividend Payout | 54% | 67% | 67% |
Takeaway:
Growth is flatter than the Gobi desert, but profits are as stable as PSU tea breaks.
5. Valuation
- CMP: ₹297
- P/E: 17.8
- P/B: ~3x
- Dividend Yield: 3.8%
Fair Value Estimation:
- Dividend Discount Model: Assuming ₹16 DPS, 9% discount = ₹250–₹300
- EV/EBITDA: At 8x FY25 EBITDA, FV = ₹310
- Peer Comparison Anchor: Peer multiples suggest FV ~₹280–₹320
EduFair Value Range: ₹280 to ₹320
Buy it for yield, hold it for life, and forget you even own it.
6. What’s Cooking – News, Triggers, Drama
- Project Commissioned: Eastern-Northeast transmission link went live (July 2025). Infra boost alert.
- Superannuation shake-up: Two EDs exited in June 2025 = fresh blood likely incoming.
- BSE Fine: ₹5.43 lakh penalty for bond reporting delay. PSU things.
- Capex in CWIP: ₹33,269 Cr in under-construction projects. Hello future earnings!
7. Balance Sheet
| Item | FY25 | FY24 | FY23 |
|---|---|---|---|
| Equity | ₹9,301 Cr | ₹9,301 Cr | ₹6,975 Cr |
| Reserves | ₹83,362 Cr | ₹77,845 Cr | ₹76,051 Cr |
| Borrowings | ₹1.31 L Cr | ₹1.23 L Cr | ₹1.28 L Cr |
| Other Liabilities | ₹42,414 Cr | ₹40,168 Cr | ₹40,615 Cr |
| Fixed Assets | ₹1.72 L Cr | ₹1.77 L Cr | ₹1.85 L Cr |
| CWIP | ₹33,269 Cr | ₹18,197 Cr | ₹13,772 Cr |
Verdict:
Clean and capital-heavy. Not a cockroach—more like a steel elephant.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash Flow |
|---|---|---|---|---|
| FY25 | ₹36,223 Cr | -₹23,533 Cr | -₹12,357 Cr | ₹333 Cr |
| FY24 | ₹37,290 Cr | -₹13,114 Cr | -₹25,903 Cr | -₹1,728 Cr |
| FY23 | ₹40,203 Cr | -₹7,138 Cr | -₹30,450 Cr | ₹2,615 Cr |
Insight:
Power Grid throws off cash like a drunken ATM. Most of it gets reinvested or paid out as dividends.
9. Ratios – Sexy or Stressy?
| Metric | FY25 | FY24 | FY23 |
|---|---|---|---|
| ROCE | 13% | 13% | 13% |
| ROE | 17.3% | 17.5% | 17.8% |
| Debt/Equity | ~1.3x | ~1.3x | ~1.6x |
| Dividend Yield | 3.79% | 3.5%+ | 4.2% (peak) |
| Debtor Days | 63 | 92 | 119 |
Conclusion:
This PSU has better cash discipline than half of Indian startups claiming to be “pre-profit unicorns”.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | Expenses | OPM | Net Profit |
|---|---|---|---|---|
| FY25 | ₹45,792 Cr | ₹6,837 Cr | 85% | ₹15,521 Cr |
| FY24 | ₹45,843 Cr | ₹6,017 Cr | 87% | ₹15,573 Cr |
| FY23 | ₹45,603 Cr | ₹6,028 Cr | 87% | ₹15,420 Cr |
TL;DR:
Flat revenue. Fat margins. Fully funded dividends. What’s not to like?
11. Peer Comparison
| Company | CMP | P/E | ROE | Sales | OPM | Div Yield |
|---|---|---|---|---|---|---|
| Power Grid | ₹297 | 17.8 | 17.3% | ₹45.8K Cr | 85% | 3.79% |
| IndiGrid InvIT | ₹156 | 37.6 | 6.6% | ₹3.2K Cr | 87.9% | 13.45% |
| PowerGrid Infra | ₹93 | 7.2 | 15.3% | ₹1.3K Cr | 133% | 12.9% |
Verdict:
For steady returns, Power Grid is like the government uncle who always pays for chai—late, but guaranteed.
12. Miscellaneous – Shareholding, Promoters
| Holder | % Holding |
|---|---|
| Promoters (GoI) | 51.34% |
| FIIs | 26.79% |
| DIIs | 18.3% |
| Public | 3.52% |
Key Takeaways:
- FII stake falling since 2022. Profit booking or PSU allergy?
- DII and retail holding slowly creeping up = re-rating hope?
13. EduInvesting Verdict™
Power Grid is not here to pump your adrenaline. It’s here to pay your power bills—literally.
It’s dull. It’s slow. But it’s safe, consistent, and throws dividends like Diwali sweets. Perfect for grandma’s portfolio and dividend chasers. Not so much for 20-year-olds looking for 10x in 2 months.
It’s the ETF-friendly, pension-fund-approved, electricity-as-a-service backbone of India.
Buy it for sleep. Not for speed.
Metadata
– Written by EduInvesting Analyst Team | 18 July 2025
– Tags: Power Grid, PSU, Electricity Transmission, Dividend Yield, Maharatna Stocks, India Infrastructure, Long-Term Compounders
