POWERINDIA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.9

📊 Core Financials:

- Quarterly PAT at ₹264 Cr vs ₹132 Cr previously → strong growth (406% variation).

- ROCE at 19.4% and ROE at 13.8% → moderate efficiency.

- Debt-to-equity ratio at 0.02 → virtually debt-free.

- Cash flows supported by earnings, though dividend yield is very low at 0.03%.

💹 Valuation Indicators:

- Current P/E: 116 vs Industry P/E: 43.9 → significantly overvalued.

- P/B ratio: ~18.1 (₹18,590 / ₹1,028) → premium valuation.

- PEG ratio: 4.01 → stretched valuation relative to growth.

- Intrinsic value appears lower than CMP, suggesting premium pricing.

🏢 Business Model & Competitive Advantage:

- Power India operates in energy solutions, electrification, and automation with strong presence in power infrastructure.

- Competitive advantage lies in technology leadership, diversified offerings, and global parent support.

- Market cap of ₹82,860 Cr reflects strong positioning in the energy sector.

📈 Entry Zone & Long-Term Guidance:

- CMP ₹18,590 is below DMA 50 (₹19,873) but above DMA 200 (₹17,881), showing short-term weakness.

- RSI at 34.2 and MACD negative → oversold zone, potential accumulation opportunity.

- Suggested entry zone: ₹17,500–₹18,200.

- Long-term holding recommended due to strong growth prospects, but caution advised due to high valuations.

Positive

• Strong quarterly PAT growth (406%).
• Low debt-to-equity ratio (0.02).
• FII holdings increased by 2.48%.
• Technology-driven business model with global backing.

Limitation

• High P/E (116) compared to industry average (43.9).
• P/B ratio ~18.1 indicates premium valuation.
• Dividend yield at 0.03% is negligible.

Company Negative News

• DII holdings reduced by -2.35%.
• Stock showing weakness below DMA 50 with negative MACD.

Company Positive News

• Quarterly PAT doubled (₹132 Cr → ₹264 Cr).
• FII holdings increased by 2.48%.

Industry

• Energy and electrification industry is growing with demand for automation and infrastructure upgrades.
• Industry P/E at 43.9 indicates moderate valuation compared to Power India’s premium pricing.

Conclusion

⚖️ Power India shows strong growth momentum, debt-free balance sheet, and global technology advantage. However, valuations are stretched with high P/E, P/B, and PEG ratios. Entry is favorable around ₹17,500–₹18,200 for long-term investors, but caution is advised due to premium pricing and limited dividend yield.