Power Grid Share Price: Both leading brokerages Prabhudas Lilladher and Motilal Oswal have recommended BUY on Maharatna PSU giant, Power Grid Corporation. In its fundamental views, Motilal believes that Power Grid will benefit from the central government's adjustment to transmission capex estimate. Meanwhile, from its technical viewpoint, Prabhudas believes the energy giant stock's RSI is indicating strength ahead and potential of uptrend.
Power Grid Share Price:
Power Grid share price ended at Rs 354.20 apiece, last week on Friday, with market cap of Rs 3,29,427.39 crore. Despite falling by over 3% on September 27, Power Grid's overall weekly performance was on a positive note with gains of nearly 4%.
Last week, Power Grid was declared as the successful bidder under Tariff based competitive bidding to establish Inter-State transmission system for "Provision of Dynamic Reactive Compensation at Khavda Pooling Station 1 (KPS1) and Khavda Pooling Station 3 (KPS3)" on build, own, operate and transfer (BOOT) basis.
YTD, Power Grid surged by nearly 49%. While in a year, the stock is up by 77%.
The stock's price-to-equity ratio stood at 21.47x, and the return on equity was robust at 17.66%. The stock is currently near its 52-week high of Rs 366.20 apiece.
In FY24, Power Grid carried bonus issues and dividends. In September last year, Power Grid delivered bonus issues in the ratio of 1:3. Notably, the company delivered two bonus shares since July 2021. The first bonus was also of a 1:3 ratio in 2021.
Coming to dividends, Power Grid delivered at least 112.50% dividends worth Rs 11.25 per share. Its current dividend yield is at 3.18%. These dividend payouts were after its second bonus issue in September 2023.
BUY Power Grid Stock:
Fundamental Pick:
According to Motilal Oswal, with the Central government adjusting its transmission capex estimate to ~INR9.2t, Power Grid (PWGR) is strategically positioned to capitalize on these investments. The NEP signifies a significant commitment to capacity expansion and the promotion of clean energy technologies.
On the valuation, Motilal said, "We reiterate our BUY rating on PWGR with a TP of Rs 425. Our TP is based on Dec'26E EBITDA and an EV/EBITDA multiple of 11x, which we believe is reasonable, though at the higher end of the historical range."
Technical Pick:
Vaishali Parekh, Vice President of Technical Research at Prabhudas Lilladher said, "The stock has been in consolidation for quite some time hovering at the significant 50EMA zone of 335 levels, currently indicating a breakout with a positive candle formation to improve the bias."
Parekh added, "The RSI is on the rise indicating strength and has triggered a buy signal with much upside potential visible from the current rate. With the chart technically looking attractive, we suggest buying the stock for an upside target of 400 keeping the stop loss of 326."
The Maharatna PSU is mainly engaged in the business of transmission of power through its EHVAC/HVDC transmission network. The company has diversified into the telecom business by leveraging its Pan India transmission network through stringing of optical ground wire(OPGW).POWERGRID has provided/providing consultancy services to domestic and international clients by leveraging its capability and experience in the field of power transmission, sub transmission, distribution management, load dispatch & communication etc.
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