On Wednesday, 6 November, Power Grid Corporation, the biggest electric power transmission firm and a Maharatna Central Public Sector Undertaking (CPSU), revealed lower-than-expected results for the second quarter of fiscal year 2025 (Q2 FY25).
In comparison to the ₹11,267 crore reported for the same period the previous year, the company’s consolidated revenue for Q2 FY25 was ₹11,277 crore, indicating a slight rise of 0.1%. The gearbox segment’s revenue, which accounts for 99 per cent of the company’s overall revenue, increased from 10,991 crores in Q2 FY24 to 11,197 crores.
Compared to ₹9710 crore in Q2 of FY24, the operational profit for the quarter was ₹9,701 crore. The EBITDA margin was 86%, which was just less than the 87.4% that the Street had anticipated. In the June quarter, the company reported an EBITDA margin of 87%.
The quarter’s finance expenses climbed by 20%, from ₹2,038 crore in Q1 FY25 to ₹2,441 crore. Consolidated net profit for the second quarter of FY25 was ₹3,793 crore, a slight 0.3% rise over the ₹3,781 crore reported for the same period the previous year.
The interim dividend of ₹4.50 per equity share of ₹10 each was approved by the company’s board of directors. “On Wednesday, December 4, 2024, the members will get their first interim dividend. Additionally, as previously mentioned, the business stated in its regulatory filing that Thursday, November 14, 2024, would be the record date to pay dividends.
The stock has dropped 13.11% to ₹318.45 from its previous peak of ₹366.20 a share due to profit booking in recent months. The stock saw an incredible one-way run, achieving a fantastic 302% gain between May 2020 and September 2024.
Motilal Oswal, a domestic broking firm, began covering the stock earlier in September with a “buy” rating and a target price of ₹425. As major growth drivers for the company, the broking cited India’s aspirations to take part in international energy initiatives like “One World, One Grid,” its ambitious goal to increase its renewable energy capacity to 500 GW by 2030, and the impending battery storage and pumped hydro projects.
With a target price of ₹355 per share, international broking company Goldman Sachs also started covering the stock in April. By FY50, it predicts that India’s capital expenditures for power transmission will surpass USD 500 billion, or around 30% of the entire energy transition capital expenditure.
