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Power Grid Corporation of India | Q3 FY13 First Cut




IndiaNivesh Securities Pvt Ltd


12 Feb 2013





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Power Grid Corporation of India Ltd. (PGCIL) | Q3FY13 First Cut Analysis Ahead of street expectation PGCIL reported Q3 FY13 (Standalone) numbers better than street expectation. PGCIL registered 39.5% y-o-y and 0.3% q-o-q growth in net profit to Rs. 11.29 bn (vs. consensus of Rs 10.22 bn) in Q3FY13. Total Revenue for the quarter came at Rs. 33.61 bn vs consensus of Rs. 31.69 bn (increased by 36.3% y-o-y and 8.9% q-o-q) driven by good performance from Transmission business. Transmission business grew 38.4% y-o-y to Rs. 32.37 bn attributed to higher short term access volume growth and higher capitalization of assets (due to commissioning of Mundra and Sasan transmission line). Telecom business also increased during the quarter by 8.6% y-o-y (flat Q-o-Q) to Rs. 582 mn. EBITDA margins for the quarter improved by 227 bps y-o-y and 45 bps q-o-q to 87% due to higher short term power access, lower O&M expenses and staff cost. The company has declared Interim Dividend - 16.1% of Share capital i.e., Rs. 1.61/- per share of Rs. 10/- each. Valuation: At CMP of INR 113, the stock is trading at 1.98x FY13E BV and at 1.78XFY14E BV. With the rising capex lined up for Power generation and transmission, we are optimistic about the future growth prospects of PGCIL. PGCIL will be the biggest beneficiary of the robust growth in the power generation and transmission capex. We advise investors accumulate stock with target price of Rs. 125. We will come out with detailed analysis after the Analyst meet scheduled on 13th February, 2013.

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