Power Grid Q4 net profit falls 3.5% to Rs 4,137 crore, slightly below estimates

Power Grid Corporation of India Ltd (PowerGrid or PGCIL) on May 22 reported a consolidated net profit of Rs 4,137.21 crore for the quarter ended March 31, 2024, down 3.5 percent from Rs 4,288.11 crore a year ago.

The Central Public Sector Undertaking (CPSU) also declared a third interim dividend of Rs 2.75 per equity share of Rs 10 each (at 45 percent of the paid-up equity share capital) for the financial year 2023-24. The interim dividend will be paid to the members within 30 days of declaring the company’s Annual General Meeting.

Analysts had anticipated that Power Grid is likely to post muted Q4 results, with revenue and profits falling from a high base year ago.

For Q4, Power Grid Corp may report a revenue of Rs 10,594 crore, down 18 percent year-on-year, according to Bloomberg consensus estimate of five brokerages. The company’s net profit was seen at Rs 4,160 crore, falling 3.7 percent from that a year ago, showed estimates.

Revenue from operations came in at Rs 11,978.11 crore, down 2.5 percent against Rs 12,285.6 crore in the corresponding quarter last year. Consolidated revenue fell marginally to Rs 12,305.4 crore in the three months ending March 31, 2024 from Rs 12,557.4 crore in the year-ago quarter, registering a fall of 2 percent.

Currently, market sentiment on Power Grid shares is mixed: 11 brokerages have a ‘buy’ rating, while 7 have ‘sell’ calls, and 3 have ‘hold’ calls on the stock.

Many brokerages were optimistic about Power Grid due to transmission opportunities, though Nuvama highlighted risks such as a slower order book and increased competition from competitive bidding. In May 2024, Nikhil Nigania of Bernstein noted the power industry’s multi-year capital expenditure cycle, naming Power Grid a top pick due to India’s strong transmission network.

The company’s earnings before interest, tax, depreciation, and amortization (EBITDA) fell 6 percent to Rs 10,488 crore in the fourth quarter of this fiscal over Rs 11,149.97 crore in the year-ago period. The EBITDA margin stood at 87.59 percent in the reporting quarter compared to 90.76 percent in the corresponding period in the previous fiscal.

The company’s transmission business saw revenues fall 4.2 percent to Rs 11,766.4 crore in the fourth quarter of FY24 from Rs 12,286.9 crore during the same period last year. Profit from the transmission business also fell 14 percent to Rs 6,731 crore.

Similarly, revenues from its telecom business rose to Rs 249.7 crore from Rs 208.8 crore, while profit from the segment fell 20.7 percent to Rs 60.14 crore.

Power Grid’s consultancy segment saw revenues rise to Rs 234.9 crore fall a revenue deficit of Rs 13.58 crore last year, profit from the segment rose to Rs 56.6 crore from a loss of Rs 146.3 crore a year ago.

The company’s shares closed 0.11 percent higher at Rs 326 on the NSE on May 22.