Buy Power Grid Corporation of India; target of Rs 321: Prabhudas Lilladher

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Capex growth: PWGR has raised its FY27 capex guidance to INR 370-400bn, with potential upside, driven by strong transmission income and a robust order book.
  • Order book visibility: The company has a strong order book of INR 2.2trn, with 11 TBCB projects won in H1FY27, providing revenue visibility.
  • T&D bidding opportunities: PWGR expects the TBCB bidding pipeline to be refilled by new HVDCs and intra-state projects under GEC-III, providing sustained growth opportunities.
  • Regulatory support: The company is expected to benefit from the new right-of-way guidelines, which will push up project costs, but also provide a stable regulatory environment.

Thesis Validation Checklist

  • Capex execution: Monitor PWGR's ability to execute its capex plans, with a focus on the INR 370-400bn guidance for FY27.
  • Order book growth: Track the company's order book, with a focus on new TBCB projects and the refilling of the bidding pipeline.
  • T&D bidding opportunities: Monitor the company's success in winning new TBCB projects and its ability to capitalize on intra-state opportunities.
  • Regulatory developments: Keep an eye on regulatory changes, particularly the implementation of the new right-of-way guidelines, and their impact on PWGR's operations.