Power Grid Corporation of India (NSEI:POWERGRID) - Share price, News & Analysis

POWERGRID fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	5/6
Financial Health	2/6
Dividends	5/6

POWERGRID Stock Overview

Power Grid Corporation of India Limited, a central transmission utility, engages in the transmission of power in India.

Rewards

Trading at 62.6% below our estimate of its fair value

Earnings grew by 39.8% over the past year

Risk Analysis

Earnings are forecast to decline by an average of 4.9% per year for the next 3 years

Debt is not well covered by operating cash flow

Unstable dividend track record

Power Grid Corporation of India Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Power Grid Corporation of India
Historical stock prices
Current Share Price	₹208.95
52 Week High	₹248.35
52 Week Low	₹167.15
Beta	0.23
1 Month Change	-7.07%
3 Month Change	-0.33%
1 Year Change	20.68%
3 Year Change	34.65%
5 Year Change	32.32%
Change since IPO	176.94%

Recent News & Updates

Jun 22

Does Power Grid Corporation of India (NSE:POWERGRID) Deserve A Spot On Your Watchlist?

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even...

Shareholder Returns

	POWERGRID	IN Electric Utilities	IN Market
7D	-1.1%	-2.5%	0.1%
1Y	20.7%	40.4%	-1.7%

Return vs Industry: POWERGRID underperformed the Indian Electric Utilities industry which returned 40.4% over the past year.

Return vs Market: POWERGRID exceeded the Indian Market which returned -1.7% over the past year.

Price Volatility

Is POWERGRID's price volatile compared to industry and market?
POWERGRID volatility
POWERGRID Average Weekly Movement	3.8%
Electric Utilities Industry Average Movement	5.0%
Market Average Movement	6.9%
10% most volatile stocks in IN Market	9.8%
10% least volatile stocks in IN Market	4.5%

Stable Share Price: POWERGRID is less volatile than 75% of Indian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: POWERGRID's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1989	8,766	Kandikuppa Sreekant	https://www.powergrid.in

Power Grid Corporation of India Limited, a central transmission utility, engages in the transmission of power in India. As of October 31, 2020, it owned and operated 1,68,140 circuit kms of transmission lines, as well as 220 EHV substations with transformation capacity of 4,19,815 MVA. The company also provides consultancy services, including power system planning and techno-economic feasibility studies; environmental and social impact assessment; design and engineering; procurement assistance; project management and construction supervision; asset management; and other services, such as owners’ and lenders’ engineer service; grid code preparation; tariff mechanisms preparation; legal and technical advisory; and market analysis advisory services.

Power Grid Corporation of India Fundamentals Summary

How do Power Grid Corporation of India's earnings and revenue compare to its market cap?
POWERGRID fundamental statistics
Market Cap	₹1.46t
Earnings (TTM)	₹168.24b
Revenue (TTM)	₹416.16b

8.7x

P/E Ratio

3.5x

P/S Ratio

Is POWERGRID overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
POWERGRID income statement (TTM)
Revenue	₹416.16b
Cost of Revenue	₹0
Gross Profit	₹416.16b
Other Expenses	₹247.92b
Earnings	₹168.24b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	24.12
Gross Margin	100.00%
Net Profit Margin	40.43%
Debt/Equity Ratio	181.2%

How did POWERGRID perform over the long term?

See historical performance and comparison

Dividends

5.6%

Current Dividend Yield

49%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is POWERGRID undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for POWERGRID?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for POWERGRID. This is calculated by dividing POWERGRID's market cap by their current preferred multiple.
What is POWERGRID's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	₹1.46t

POWERGRID key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	6.7x
Enterprise Value/EBITDA	7.4x
PEG Ratio	-1.8x

Price to Earnings Ratio vs Peers

How does POWERGRID's PE Ratio compare to its peers?

POWERGRID PE Ratio vs Peers

The above table shows the PE ratio for POWERGRID vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	71.4x

Forward PE

Price-To-Earnings vs Peers: POWERGRID is good value based on its Price-To-Earnings Ratio (8.7x) compared to the peer average (71.4x).

Price to Earnings Ratio vs Industry

How does POWERGRID's PE Ratio compare vs other companies in the Electric Utilities Industry?

Price-To-Earnings vs Industry: POWERGRID is good value based on its Price-To-Earnings Ratio (8.7x) compared to the Indian Electric Utilities industry average (28x)

Price to Earnings Ratio vs Fair Ratio

What is POWERGRID's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

POWERGRID PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	8.7x
Fair PE Ratio	13.6x

Price-To-Earnings vs Fair Ratio: POWERGRID is good value based on its Price-To-Earnings Ratio (8.7x) compared to the estimated Fair Price-To-Earnings Ratio (13.6x).

Share Price vs Fair Value

What is the Fair Price of POWERGRID when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: POWERGRID (₹208.95) is trading below our estimate of fair value (₹558.39)

Significantly Below Fair Value: POWERGRID is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: POWERGRID's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

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Future Growth

How is Power Grid Corporation of India forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-4.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: POWERGRID's earnings are forecast to decline over the next 3 years (-4.9% per year).

Earnings vs Market: POWERGRID's earnings are forecast to decline over the next 3 years (-4.9% per year).

High Growth Earnings: POWERGRID's earnings are forecast to decline over the next 3 years.

Revenue vs Market: POWERGRID's revenue (3.8% per year) is forecast to grow slower than the Indian market (11.5% per year).

High Growth Revenue: POWERGRID's revenue (3.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: POWERGRID's Return on Equity is forecast to be low in 3 years time (17.7%).

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Past Performance

How has Power Grid Corporation of India performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

16.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: POWERGRID has high quality earnings.

Growing Profit Margin: POWERGRID's current net profit margins (40.4%) are higher than last year (30.4%).

Past Earnings Growth Analysis

Earnings Trend: POWERGRID's earnings have grown by 16.2% per year over the past 5 years.

Accelerating Growth: POWERGRID's earnings growth over the past year (39.8%) exceeds its 5-year average (16.2% per year).

Earnings vs Industry: POWERGRID earnings growth over the past year (39.8%) exceeded the Electric Utilities industry 3.3%.

Return on Equity

High ROE: Whilst POWERGRID's Return on Equity (22.07%) is high, this metric is skewed due to their high level of debt.

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Financial Health

How is Power Grid Corporation of India's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: POWERGRID's short term assets (₹223.8B) do not cover its short term liabilities (₹448.3B).

Long Term Liabilities: POWERGRID's short term assets (₹223.8B) do not cover its long term liabilities (₹1,298.7B).

Debt to Equity History and Analysis

Debt Level: POWERGRID's net debt to equity ratio (174.6%) is considered high.

Reducing Debt: POWERGRID's debt to equity ratio has reduced from 238.6% to 181.2% over the past 5 years.

Debt Coverage: POWERGRID's debt is not well covered by operating cash flow (18.9%).

Interest Coverage: POWERGRID's interest payments on its debt are well covered by EBIT (3.1x coverage).

Balance Sheet

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Dividend

What is Power Grid Corporation of India current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

5.62%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: POWERGRID's dividend (5.62%) is higher than the bottom 25% of dividend payers in the Indian market (0.44%).

High Dividend: POWERGRID's dividend (5.62%) is in the top 25% of dividend payers in the Indian market (1.9%)

Stability and Growth of Payments

Stable Dividend: POWERGRID's dividend payments have been volatile in the past 10 years.

Growing Dividend: POWERGRID's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (48.7%), POWERGRID's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (45.1%), POWERGRID's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

1.9yrs

Average management tenure

CEO

Kandikuppa Sreekant (58 yo)

2.83yrs

Tenure

₹6,539,656

Compensation

Shri. Kandikuppa Sreekant serves as Chairman and Managing Director of Power Grid Corporation of India Limited since August 5, 2019 & has been it's Director of operations since June 1 2022 . He serves as Ch...

CEO Compensation Analysis

Compensation vs Market: Kandikuppa's total compensation ($USD83.66K) is below average for companies of similar size in the Indian market ($USD1.25M).

Compensation vs Earnings: Kandikuppa's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: POWERGRID's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.

Board Members

Experienced Board: POWERGRID's board of directors are not considered experienced ( 1.8 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/24 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31