Time period given by analyst is one year when Power Grid Corporation of India Ltd. price can reach defined target.
Power Grid Corporation of India Ltd., incorporated in the year 1989, is a Large Cap company (having a market cap of Rs 123012.11 Crore) operating in Power sector.
Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 10391.61 Crore, down -3.93 % from last quarter Total Income of Rs 10816.33 Crore and up 5.86 % from last year same quarter Total Income of Rs 9816.72 Crore. Company reported net profit after tax of Rs 5981.03 Crore in latest quarter.
Investment Rationale
With the benefit of sales to InvIT, we see potential for the proceeds being distributed to shareholders. This should aid payout ratios (60-70%) and translate to a DPS of INR26-27/share over the next two years, implying a dividend yield of 7-8%. The brokerage sees additional distribution potential from: a) share in dividends from SPVs of the InvIT, b) sale of 26% stake in five SPVs, and c) further transfer of assets to the InvIT. Given a 7-8% dividend yield, backed by steady earnings growth (5-6% CAGR) and RoEs of 18%, PWGR remains attractively valued at 1.6x FY22E P/BV.
Promoter/FII Holdings
Promoters held 51.3 per cent stake in the company as of June 30, 2021, while FIIs held 28.3 per cent, DIIs 13.9 per cent and public and others 6.5 per cent.
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