Power Transmission Archives

POWERGRID – Power Grid Corporation – Q4 FY26 Earnings Call – 18-May-26

Power Grid Corporation’s topline growth is structurally robust (₹15 lakh crore+ opportunity), but bottomline and margins hinge on execution pace (CapEx → capitalization conversion) and cost mitigation (RoW, supply chain, IRR protection).

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Also see: POWERGRID – Power Grid Corporation – Q4 FY26 Financial Results – 15-May-26

3-Scenario Framework

📊 Base Case (60% Probability)

CapEx sustains at ₹40,000–45,000 crore/year (FY27–FY29) with ₹30,000–35,000 crore capitalization, driven by TBCB pipeline execution (₹1.1 lakh crore bidding) and HVDC rollouts (2–3/year). RoW and supply chain bottlenecks ease via market rate mechanisms and OEM expansions. PAT grows 8–10% CAGR (FY26–FY29) on capitalization tailwinds; margins stable (~25% EBITDA) as cost inflation offset by change-in-law claims. ESG leadership and global PPPs add 5–10% to valuation premium.

POWERGRID – Power Grid Corporation – Q4 FY26 Financial Results – 15-May-26

PowerGrid’s FY26 shows accelerated capex (₹43,654 Cr CWIP, +54%) building future tariff revenues, with near‑term softness expected. Risks: 8.9% pre‑tax profit decline, opaque other‑expense spike, stretched receivables. PAT beat is tax‑driven; re‑rating hinges on asset capitalisation outpacing finance costs — yield‑plus‑pipeline story until then.

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🔍 Observations

Topline

Revenue from operations grew a modest 2.1% YoY (₹45,792 Cr → ₹46,733 Cr); transmission segment revenue actually declined 1.6% YoY (₹44,777 Cr → ₹44,083 Cr), with growth offset by consultancy surging 106% YoY (₹1,137 Cr → ₹2,347 Cr).
Q4FY26 revenue (₹11,666 Cr) was the weakest quarter of FY26, down 5.9% vs Q3 and 5.0% vs Q4FY25 — a notable sequential and YoY dip.
Other income fell sharply — ₹1,667 Cr in FY25 to ₹952 Cr in FY26 (-42.9%) — dragging total income flat despite operational growth.

Bottomline

Reported PAT rose 2.6% YoY (₹15,521 Cr → ₹15,928 Cr), but this masks a large deferred tax credit of ₹4,581 Cr in FY26 vs a charge of ₹410 Cr in FY25 — a swing of ~₹4,991 Cr.
Pre-tax profit (excluding regulatory deferral) declined 8.9% YoY (₹19,018 Cr → ₹17,321 Cr), reflecting genuine earnings pressure.
Regulatory deferral account swung from a ₹276 Cr income in FY25 to a ₹2,774 Cr expense (net of tax) in FY26, compressing stated profits materially.

Margins

Total expenses grew 6.7% YoY (₹28,331 Cr → ₹30,231 Cr); other expenses spiked 47.6% (₹4,123 Cr → ₹6,085 Cr) — the single largest cost deterioration, warranting scrutiny.
Finance costs declined 2.9% YoY (₹8,700 Cr → ₹8,448 Cr) despite higher borrowings — suggests favourable refinancing or mix shift.
Segment EBIT margin compressed in transmission (EBIT ₹27,125 Cr → ₹26,353 Cr on near-flat revenue), while consultancy EBIT nearly tripled (₹150 Cr → ₹403 Cr) — a bright but small spot.

Growth Trajectory

EPS (excluding regulatory deferral) grew 22.7% YoY (₹16.39 → ₹20.11), largely tax-driven; EPS including regulatory deferral grew only 2.6% (₹16.69 → ₹17.13).
Capex accelerated sharply — investing outflows hit ₹37,279 Cr in FY26 vs ₹24,134 Cr in FY25 (+54.5%) — signalling aggressive network expansion ahead.
CWIP jumped from ₹33,269 Cr to ₹43,654 Cr (+31.2%), building a substantial asset pipeline that will convert to revenue-generating PPE over the next 2–4 years.

POWERGRID – Q3 FY26 Earnings Call – 2-Feb-26

POWERGRID’s topline resilient (RE evacuation tailwinds), but bottomline faces 100–300bps margin compression from RoW costs and storage regulatory delays; CapEx efficiency (not volume) will dictate FCF conversion and EPS growth.

1–2 minutes

3-Scenario Framework

📊 Base Case (50% Probability)

Key Variables: (1) RoW guidelines sustain execution + (2) Transformer relaxations approved.

₹32,000 crore FY26 CapEx achieved, with 80% TBCB realization.
HVDC Barmer-Kala Amb awarded in FY27, BESS tariffs approved by H2CY26.
Outcome: 12–15% revenue CAGR, margins stable at 28–30% (EBITDA/Revenue).