At a Glance
Power Grid Corporation of India Ltd (PGCIL) – the Maharatna that keeps India’s lights on – reported Q1 FY26 revenue of ₹11,196 Cr (+2% YoY) and PAT of ₹3,631 Cr (-2.5% YoY). Operating margin is still a whopping 81% (because transmission is a toll road business). At P/E 17x, the stock offers 3.9% dividend yield but is crawling on growth. Investors are holding for payouts, not fireworks.
Introduction
Imagine a company that charges rent for every electron flowing through the national grid. That’s Power Grid. It’s boring, regulated, stable – the perfect bedtime stock. The GoI owns 51.3%, so you also own it indirectly if you pay taxes. While earnings were flat, the company announced a ₹30,000 Cr fundraise and JV in Nepal. Translation: expansion continues, but don’t expect it to sprint.
Business Model (WTF Do They Even Do?)
- Core: Interstate Power Transmission (over 85% revenue) – think highways for electricity.
- Other: Telecom (optical fiber), Consultancy, Smart Grid solutions.
- Revenue Source: Tariffs regulated by CERC – guaranteed returns on capex.
- Moat: Monopoly, regulatory protection, scale.
In short, a toll collector for electricity.
Financials Overview
Q1 FY26
- Revenue: ₹11,196 Cr (+1.7% YoY)
- EBITDA: ₹9,102 Cr (OPM 81%)
- PAT: ₹3,631 Cr (-2.5% YoY)
- EPS: ₹3.9
FY25 Recap
- Revenue: ₹45,982 Cr
- PAT: ₹15,428 Cr
- ROE: 17.3%
- Dividend Payout: 62.6% (juicy!)
Comment: Rock-solid margins, modest profits, cash cow status intact.
Valuation
- P/E Method
- EPS (TTM): ₹16.6
- Industry P/E: 15x
- Fair Value ≈ ₹16.6 × 15 = ₹250
- P/B Method
- BV: ₹99.6
- P/B ~2.5x
- Fair Value ≈ ₹250–₹270
- DCF:
- Stable cash flows → ₹260–₹300
🎯 Fair Value Range: ₹250 – ₹300
CMP ₹289 is fairly valued.
What’s Cooking – News, Triggers, Drama
- ₹30,000 Cr fundraise planned to support upcoming transmission projects.
- JV with Nepal for cross-border grid – strategic growth.
- 82nd NCD issue lined up – cheap debt, stable returns.
- Trigger: More renewable integration = more transmission needs.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 2,66,107 |
| Liabilities | 1,82,745 |
| Net Worth | 92,663 |
| Borrowings | 1,31,030 |
Remark: Huge borrowings but matched with regulated returns.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 40,203 | 37,290 | 36,223 |
| Investing | -7,138 | -13,114 | -23,533 |
| Financing | -30,450 | -25,903 | -12,357 |
Remark: Strong operating cash, capex heavy, financing outflows due to dividends.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 17% |
| ROCE | 13% |
| P/E | 17x |
| PAT Margin | 31% |
| D/E | 1.4 |
Remark: Solid returns despite high leverage.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 45,603 | 45,843 | 45,982 |
| EBITDA | 39,576 | 39,826 | 38,426 |
| PAT | 15,420 | 15,573 | 15,428 |
Remark: Revenue flat, profits steady.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Power Grid | 45,982 | 15,428 | 17x |
| IndiGrid Trust | 3,353 | 337 | 39x |
| Powergrid Infra. | 1,266 | 1,172 | 7x |
Remark: PGCIL is the big daddy with unmatched scale.
Miscellaneous – Shareholding, Promoters
- Promoters (GoI): 51.3%
- FIIs: 26.5%
- DIIs: 18.5%
- Public: 3.6%
Observation: Heavy institutional interest, low retail float – stable investor base.
EduInvesting Verdict™
PGCIL is the definition of a defensive stock – regulated, dividend-rich, and low volatility. The growth is snail-paced, but capex on renewables and cross-border grids could push earnings gradually higher.
SWOT Quickie
- Strengths: Monopoly, regulated returns, high dividend.
- Weaknesses: Low growth, high capex dependence.
- Opportunities: Renewable energy transmission, international projects.
- Threats: Tariff cuts, policy changes.
Final Word: A safe haven for long-term investors craving steady dividends, not explosive returns.
Written by EduInvesting Team | 30 July 2025
SEO Tags: Power Grid Q1 FY26 Results, PGCIL Dividend Stock Analysis, Transmission Utility Stock Review
