POWERGRID - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

🔋 Fundamental Stock Analysis: Power Grid Corporation of India Ltd (POWERGRID) Rating: 3.7

🧾 Financial Health & Profitability

Return Metrics

ROE of 17.3% and ROCE of 12.9% — solid returns for a capital-heavy utility business.

EPS ₹16.7 supports valuation efficiency.

Balance Sheet Strength

Debt-to-Equity at 1.41 — reasonable for infrastructure, though interest cost sensitivity exists.

Dividend Yield: 3.84% — appealing for income-oriented investors.

Earnings Performance

PAT slightly dipped (–0.56% QoQ), but still a robust ₹4,143 Cr — reflects stability.

Large-scale government contracts ensure predictability in cash flows.

💰 Valuation Insights

Metric Value Interpretation

P/E Ratio 17.6 In line with industry average — fairly priced

P/B Ratio ~2.94 Premium reflects government-backed strength

PEG Ratio 5.32 Indicates overvaluation relative to expected growth

RSI / MACD RSI 45.2, MACD –0.11 Neutral momentum; soft bearish signal

Price vs DMA ₹293 vs 50-DMA ₹295 / 200-DMA ₹297 Trading just below trend lines — may invite accumulation

Volume: Steady at ~71 lakh — reflects active investor interest.

52-Week Index Position: At 38.5% — implies attractive re-entry zone vs. recent highs.

🧠 Business Model & Moat

Company Profile: Power transmission backbone of India — regulated asset model guarantees steady returns.

Moat & Edge

Near-monopoly status in interstate transmission.

Backed by central government — minimizes default and regulatory risks.

Expansion into renewables and smart grid opportunities reinforces future relevance.

📌 Investment Strategy

Entry Zone: ₹285–₹295 — accumulation zone just below key moving averages; technical support expected.

Long-Term Outlook

Ideal for conservative portfolios seeking steady dividends and predictable earnings.

Monitor tariff revisions, capex cycles, and debt servicing trends.

FII trimming may reflect valuation caution; DII interest steady.

Want to dig deeper into dividend yield comparisons or map POWERGRID against other utilities like NTPC or NHPC for sector clarity? I can roll out a head-to-head framework in a flash.

Edit in a page