Maharatna PSU Stock Falls 18% In 7 Days, Buy Today For Target Price Of Rs 260: Jefferies

PSU Maharatna company Power Grid Corporation of India is witnessing a downward trend in the share market. The stock has witnessed a sharp decline of 6.98% intraday at Rs 188 apiece on BSE. Earlier on September 23, 2022 the stock declined by as much as 8.07% as Indian share market also fell sharply by 1020 points to close
at 58,098.

Today, BSE Sensex has shed 866 points or 1.48% at 57258 till morning trade and NSE Nifty 50 fell by 286 points at 17042.

The 52-week high is Rs 248 and 52-week low is Rs 175 apiece, respectively. The stock is trading at a discount of 24% from its 52-week high level. The company has a market capitalization of Rs 1,31,103.64 crore at the time of writing the report.

Power Grid Corporation of India Limited is a transmission company engaged in the power transmission business with responsibility for planning, implementation, operation and maintenance of inter-state transmission systems and operation of national and regional load dispatch centres.

Power Grid for the quarter ended June 30, 2022 announced a consolidated total income of Rs 11,168.54 crore, up .91 % from last quarter total income of Rs 11,067.94 crore. It has announced a net profit after tax of Rs 3,805.74 crore in latest quarter.

Meanwhile, leading brokerage firm Jefferies has assigned buy rating for Power Grid with a target price of Rs 260 apiece. If investors buy the shares of Power Grid today at Rs 188 apiece, it will fetch a potential return of 38%.

According to Jefferies, there are reports that indicate that Power Ministry is in talks with Power Grid to purchase PFC's 52.63% stake (Rs 14,400 crore) in REC. Jefferies noted that PFC should preferably finance power projects through stake sale proceeds, and added Power Grid had sufficient cash and reiterated positive view on the 1-year and medium-term transmission spend growth story.

As per Jefferies observation, the purchase of PFC's stake in REC was a near-term dampener and could adversely impact FY23-25E EPS by 3-5%. The relative insulation of Power Grid, unlike NTPC which has made investments outside the core, and execution track record ensured the company's leadership in transmission, even after the introduction of private competition in 2013.

Earlier on September 22, the company announced stated in its BSE filing that Shri K. Sreekant, CMD POWERGRID took the additional charge of the post of Director (Finance).

The stock has been picked from the brokerage report of Jefferies. 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.