PSU stocks surges 3.8% from their intraday low, driven by robust capital expenditure plans and encouraging Q3 results. Strong efforts towards expanding infrastructure and enhancing grid reliability, coupled with positive financial performance, sparked investor confidence, leading to a significant rebound in share price.
Share Price
The shares of Power Grid Corporation Limited are currently trading at Rs. 281.85 down by 0.69% from its previous close of Rs. 283.8 as of February 04, 2025. The stock also recovered substantially from its intraday low of Rs. 272.1.
Recent Updates
Future Expansion and Investment Plans
Power Grid Corporation has also announced significant investments aimed at bolstering its infrastructure and supporting India’s energy transition. The company has approved a project to create a 400kV switchyard and install 21500 MVA, 765/400kV ICTs at Vataman (AIS), part of the Transmission System for Offshore Wind Zone Phase-1 (500 MW VGF off the coast of Gujarat).
The estimated cost of this project is Rs 319.42 crore, with a target commissioning date of 19 February 2026. This investment aligns with the government’s push for renewable energy integration, particularly offshore wind projects.
In addition to the Vataman project, Power Grid has also proposed the development of an additional transmission system to provide a redundant power supply to the Dholera area. This system, with an estimated cost of Rs 109.74 crore, is scheduled to be commissioned by 1 March 2026.
The project is in line with the broader vision of supporting the offshore wind zone in Gujarat and enhancing grid reliability in key industrial zones. These initiatives underscore the company’s role in ensuring reliable and sustainable power transmission, especially in the context of renewable energy integration.
Q3 FY25 Results
Power Grid Corporation of India Ltd (PGCIL), a major player in India’s power transmission sector, reported a decline in its consolidated net profit for the third quarter (Q3) of FY25. The company’s net profit fell by 4.1% YoY, amounting to Rs 3,861.63 crore, compared to Rs 4,028.25 crore in Q3 FY24.
Revenue from operations declined by 2.7% YoY, standing at Rs 11,233.03 crore for the quarter ended 31 December 2024. The drop in revenue reflects some pressure on the transmission business, the core of Power Grid’s operations.
Despite the drop in revenue, Power Grid managed to reduce its total expenses by 3.5% YoY to Rs 6,828.65 crore in Q3 FY25. The company effectively managed its operating costs, which helped offset the impact of lower revenue.
Employee expenses decreased by 1.8% YoY, amounting to Rs 596.74 crore, while finance costs saw a significant reduction of 21.6% YoY, totaling Rs 1,917.41 crore. These efforts in cost control helped Power Grid maintain profitability despite the revenue challenges.
Segmental Performance
The segmental breakdown of Power Grid’s performance offers insights into its diverse business portfolio. The transmission business, which constitutes the bulk of the company’s operations, reported a revenue of Rs 11,140.59 crore, down by 1.53% YoY.
Meanwhile, the consultancy business showed strong growth, with a 37.75% increase in revenue to Rs 240.71 crore. The telecom business also performed well, with a 22.79% growth in revenue, reaching Rs 274.34 crore.
These results highlight the company’s success in diversifying its revenue streams, which can help mitigate the pressures on its core transmission business.
Interim Dividend Declaration
Despite the challenging financial performance, Power Grid Corporation’s board has declared a second interim dividend of Rs 3.25 per share for the financial year 2024-25. The dividend will be paid to shareholders on 28 February 2025, with the record date for eligibility set for 7 February 2025.
Future Outlook
The company’s future outlook remains positive, given its key role in India’s power transmission infrastructure and its ongoing efforts to diversify and invest in renewable energy. The government’s continued support, coupled with Power Grid’s strategic investments, positions the company well for long-term growth in the evolving energy sector.
Written By: Diangshu Kundu
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