Bernstein has maintained an ‘Outperform’ rating on Power Grid Corporation of India Ltd, assigning a target price of ₹340, which implies a 14.8% upside from the current market price of ₹296.10 (as of latest close).
The brokerage flagged that Power Grid reported very low capitalization in FY25 at ₹90 billion, falling significantly short of its guidance range of ₹160–170 billion. This, combined with the impact of the new five-year regulatory framework, resulted in a year-on-year drop in net earnings.
Despite the shortfall, Bernstein noted that management commentary remains optimistic, underlining the urgent need for capex and suggesting upside potential in future numbers. However, it added that most of the current work pipeline lies under the TBCB (tariff-based competitive bidding) model, which typically yields limited returns in early phases, and persistent right-of-way issues continue to pose challenges.
Bernstein remains constructive on Power Grid’s long-term outlook but warns that earnings growth may remain muted in the near term. It also highlighted a broader implication for the renewable energy sector, suggesting continued delays in transmission capacity rollout may cause another year of execution misses for several renewable developers.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a financial advisor before making any investment decisions.
