Release Date: May 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Power Grid Corp Of India Ltd (BOM:532898, Financial) achieved a system availability of 99.82% in FY25, indicating high operational efficiency.
- The company has been recognized as one of the best utilities globally in terms of operational efficiency and reliability.
- Power Grid Corp Of India Ltd (BOM:532898) has successfully commissioned several major projects, including a digital substation at 765 kV, enhancing technological capabilities.
- The company has a robust pipeline with projects worth approximately INR 154,680 crores, ensuring future growth.
- Power Grid Corp Of India Ltd (BOM:532898) has achieved a significant increase in telecom segment revenue, crossing INR 1,000 crore for the first time.
Negative Points
- The company faced delays in project capitalization due to ROW issues and supply chain challenges, impacting timelines.
- There is a reduction in dividend payout due to increased equity requirements for project execution.
- The competitive intensity in TBCB projects remains high, potentially affecting future project wins.
- Power Grid Corp Of India Ltd (BOM:532898) experienced a dip in ROE by about 100 basis points at the consolidated level.
- The company is facing challenges with ROW compensation policies, leading to potential cost overruns and project delays.
Q & A Highlights
Q: What is the transmission bid pipeline for the current financial year, and what is the guidance for FY26-'27 in terms of capitalization?
A: For FY25, Power Grid had a CapEx of over INR 26,000 crore and a capitalization of over INR 9,000 crore. Due to challenges like ROW issues and skill shortages, some projects were delayed but are expected to be commissioned in Q1 and Q2 of FY26. For FY26, the expected capitalization is between INR 23,000 to 25,000 crore. The bid pipeline for FY26 is about INR 45,000 to 46,000 crore, with INR 34,000 crore already under bidding.
Q: How does the delay in RE projects impact Power Grid's capitalization and works in hand?
A: Power Grid's transmission lines are not dependent on whether PPAs are signed or not. Once a project is commissioned, tariffs are received, so delays in RE projects or PPAs do not affect Power Grid's financials.
Q: Has there been any change in competitive intensity for TBCB projects?
A: Power Grid maintains a minimum ROE of 12-13% and has been successful in winning projects while maintaining this threshold. The competitive intensity has not significantly changed, and Power Grid continues to secure substantial projects.
Q: What is the status of the HVDC projects, and are there more in the planning?
A: Current HVDC projects include Khada to Nagpur and others like Leh to Pang. Future projects may include international connections such as India to Singapore and India to Oman. The Paradeep to Andaman project is under preliminary study, with more clarity expected in the coming months.
Q: What is the potential opportunity in the intrastate transmission sector?
A: Intrastate transmission projects are expected to see significant growth, with over INR 3 lakh crore in CapEx anticipated. States like UP, MP, Rajasthan, and Maharashtra are already pursuing TBCB projects, and Power Grid is actively participating in these opportunities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
