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POWERGRID - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | POWERGRID | Market Cap | 2,33,907 Cr. | Current Price | 251 ₹ | High / Low | 322 ₹ |
| Stock P/E | 14.9 | Book Value | 106 ₹ | Dividend Yield | 3.58 % | ROCE | 13.0 % |
| ROE | 17.1 % | Face Value | 10.0 ₹ | DMA 50 | 264 ₹ | DMA 200 | 279 ₹ |
| Chg in FII Hold | -0.93 % | Chg in DII Hold | 0.86 % | PAT Qtr | 4,160 Cr. | PAT Prev Qtr | 3,555 Cr. |
| RSI | 37.3 | MACD | -2.68 | Volume | 1,05,61,254 | Avg Vol 1Wk | 1,91,46,961 |
| Low price | 247 ₹ | High price | 322 ₹ | PEG Ratio | 6.00 | Debt to equity | 1.38 |
| 52w Index | 5.42 % | Qtr Profit Var | 6.83 % | EPS | 16.9 ₹ | Industry PE | 15.1 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT rose to ₹4,160 Cr from ₹3,555 Cr, showing healthy growth. EPS at ₹16.9 indicates consistent earnings power.
- Margins: ROE at 17.1% is strong, while ROCE at 13.0% reflects moderate efficiency.
- Debt Ratios: Debt-to-equity at 1.38 is manageable for a utility company, though leverage remains notable.
- Cash Flows: Stable operating cash flows supported by regulated returns and consistent profitability.
💹 Valuation Indicators
- P/E Ratio: 14.9, nearly aligned with industry average of 15.1, suggesting fair valuation.
- P/B Ratio: Current price ₹251 vs. book value ₹106 → ~2.37x, moderately expensive relative to assets.
- PEG Ratio: 6.00, indicating valuation is high compared to growth prospects.
- Intrinsic Value: Fairly valued at current levels, with limited margin of safety.
🏢 Business Model & Competitive Advantage
- Power Grid Corporation is India’s central transmission utility, operating a regulated and stable business model.
- Competitive advantage lies in government backing, monopoly-like position in transmission, and predictable cash flows.
- Strong dividend-paying capacity enhances investor appeal.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹240 – ₹250, near 52-week low and below DMA50.
- Long-Term Holding: Suitable for conservative investors seeking stable dividends and steady growth, though upside potential is limited due to high PEG ratio.
✅ Positive
- Strong ROE of 17.1% ensures good shareholder returns.
- Dividend yield of 3.58% provides steady income.
- Quarterly PAT growth of 6.83% shows operational strength.
⚠️ Limitation
- PEG ratio of 6.00 suggests valuation is high relative to growth.
- ROCE at 13.0% is moderate compared to peers in capital-intensive sectors.
- Stock trading below DMA200 indicates weak near-term momentum.
📉 Company Negative News
- FII holding decreased (-0.93%), showing reduced foreign investor confidence.
- Stock has underperformed with only 5.42% gain over 52 weeks.
📈 Company Positive News
- DII holding increased (+0.86%), reflecting domestic institutional support.
- Quarterly PAT improved from ₹3,555 Cr to ₹4,160 Cr.
- Strong dividend yield continues to attract income-focused investors.
🏭 Industry
- Power transmission sector trades at industry PE of 15.1, nearly aligned with Power Grid’s valuation.
- Sector benefits from government infrastructure push and rising electricity demand.
🔎 Conclusion
- Power Grid offers stable earnings, strong ROE, and attractive dividends.
- Valuation is fair but growth prospects are limited, as reflected in high PEG ratio.
- Best suited for long-term conservative investors seeking steady income, with entry around ₹240 – ₹250 providing a reasonable margin of safety.
Would you like me to extend this into a comparative HTML snapshot of Power Grid versus NTPC, since both are government-backed utilities but differ in growth and risk profiles?