Maharatna Power Stock, Trading 14% Away From 52-Week Low, Gets Accumulate Call: ICICI Securities

Leading Maharatna PSU stock, Power Grid Corporation of India Ltd is currently trading 14% away from its 52-week low level. The company recently announced an interim dividend of Rs 5 per equity share. The large cap company came into existence in 1989 and operates in Power sector. Check key takeaways below:

1. Power Grid Corporation Of India To Pay Interim Dividend Of Rs 5 Per Equity Share

The board of director's of the Maharatna company said in the regulatory filing, "In terms of Regulation 30 and 43 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, it is also informed that the Board of Directors, in their Meeting held today i.e. on 5th November, 2022, have approved the payment of Interim Dividend of Rs. 5/- per equity share of Rs. 10/- each (@50% of the paid-up equity share capital) for the Financial Year 2022-23."

The Interim Dividend shall be paid to the Members on 30th November, 2022.

2. Power Grid Stock Outlook & Return

The current market price of the stock is Rs 217 apiece. The stock's 52-week high is Rs 248 apiece and 52-week low is Rs 186 apiece, respectively. The stock has a market capitalisation of Rs 1,51,960.24 crore. The stock has given a return of 40% in last 5-years, 46% in last 3-years, and 12% in last 1-year. In last 3-months, the stock has declined 3%.

3. Power Grid Corporation Valuation

According to ICICI Securities, "We maintain ADD on the stock with DCFbased target price of Rs242/sh. Over FY23E-FY28E, we have factored in capex of Rs677bn and capitalisation of Rs810bn (Rs230bn works-in-hand, Rs290bn RTM projects awarded, Rs290bn potential TBCB wins {50% of the estimated Rs600bn project pipeline over the next three years}). However, we have not included capex on other businesses, including smart metering, as we await further clarity on its revenue models. The stock is currently trading at FY24E P/E of 10x and P/B of 1.8x, with a dividend yield of 6.7%. Over FY23E-FY24E, we expect PGCIL to pay out ~Rs30/sh as dividend cumulatively. It has announced an interim dividend of Rs5/sh with Q2FY23 result."

4. About Power Grid

Power Grid Corporation of India is a Schedule 'A', 'Maharatna' Public Sector Enterprise of Government of India. It was incorporated on 23rd Oct 1989 under the Company Act, 1956. It is a listed company, with 51.34% holding of Government of India and the balance is held by Institutional Investors and public. The company is engaged in the transmission of bulk power across various stated of India. Power Grid owns and operates 90% of country's interstate and inter-regional electric power transmission system, according to its official website.

Disclaimer

The stock has been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.