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Power Grid Corporation — Q2 FY25
Power Grid reported consolidated Q2 FY25 revenue of INR 11,846 crore (+2.7% YoY) and PAT of INR 3,793 crore (+0.3% YoY), with muted growth due to a INR 300 crore O&M cost reduction under the new CERC tariff regulation and a INR 100 crore loss from associate...
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Power Grid reported consolidated Q2 FY25 revenue of INR 11,846 crore (+2.7% YoY) and PAT of INR 3,793 crore (+0.3% YoY), with muted growth due to a INR 300 crore O&M cost reduction under the new CERC tariff regulation and a INR 100 crore loss from associate EESL. Management highlighted a strong pipeline of INR 143,295 crore projects in hand and expects CapEx to rise to INR 25,000-30,000 crore in FY26, with capitalization reaching INR 35,000-40,000 crore in 2-3 years. Key growth drivers include the National Electricity Plan requiring INR 9.16 lakh crore transmission investment by 2032, with Power Grid targeting a 50% win rate. Risks include competitive pressure in TBCB projects and continued EESL losses.
पावर ग्रिड ने दूसरी तिमाही में 11,846 करोड़ रुपये की कमाई की, जो पिछले साल से 2.7% ज्यादा है। मुनाफा 3,793 करोड़ रुपये रहा, जो सिर्फ 0.3% बढ़ा। यह धीमी बढ़ोतरी नए नियमों के कारण हुई, जिससे कंपनी को 300 करोड़ रुपये का खर्च कम करना पड़ा। साथ ही, उसकी साझेदार कंपनी EESL से 100 करोड़ रुपये का नुकसान हुआ। कंपनी के पास 1,43,295 करोड़ रुपये के प्रोजेक्ट हैं। अगले साल खर्च 25,000-30,000 करोड़ रुपये होने की उम्मीद है। 2-3 साल में 35,000-40,000 करोड़ रुपये के प्रोजेक्ट पूरे होंगे। देश की बिजली योजना के तहत 2032 तक 9.16 लाख करोड़ रुपये का निवेश होगा, जिसमें पावर ग्रिड को आधे प्रोजेक्ट मिलने की उम्मीद है। जोखिम में प्रतिस्पर्धा और EESL का लगातार नुकसान शामिल है।
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EESL associate losses continue
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Transmission System Availability
99.80%
+5bps YoY
Achieved 99.80% availability in H1 FY25, above the incentive threshold of 99.75%.
Projects in Hand
INR 143,295 crore
+INR 38,008 crore YoY
Includes RTM, TBCB, and new projects like Leh-Pang HVDC and offshore wind.
TBCB Projects Won in Q2
8 projects
+8 projects YoY
Won 8 out of 13 TBCB projects bid in Q2, representing 78% of annual tariff.
Smart Meters Installed
1 lakh
N/A
Installed 1 lakh smart meters out of 63 lakh planned in Gujarat projects.
What Changed vs Last Quarter
NEW
Capitalization to reach INR 35,000-40,000 crore in 2-3 years
Capitalization is expected to ramp up to INR 35,000-40,000 crore per annum as projects are commissioned.
NEW
Target win rate of ~50% in TBCB projects
Management expects to win about 50% of upcoming TBCB projects, translating to INR 192,000 crore additional orders by 2032.
UPDATED
CapEx target of INR 18,000 crore for FY25, likely to exceed INR 20,000 crore
Management expects CapEx to be at least INR 18,000 crore this fiscal, with potential to exceed INR 20,000 crore.
UPDATED
CapEx of INR 25,000-30,000 crore in FY26
Next fiscal CapEx is guided to be between INR 25,000 and INR 30,000 crore.
DROPPED
Bidding pipeline of INR 100,000+ crore
Over INR 100,000 crore of transmission projects are in the pipeline, with 70-80% expected to be awarded in FY25.
DROPPED
Data center Phase I commissioning in Q4 FY25
The 1,000-rack data center at Manesar is expected to be commercially available by Q4 FY25, with Phase II of INR 2,000 crore planned.
NEW RISK
EESL associate losses continue
EESL contributed a loss of INR 100 crore in H1 FY25 due to mounting receivables and interest costs, with no clear timeline for reversal.
NEW RISK
O&M cost reduction under new CERC regulation
New CERC tariff regulation (2024-29) reduced O&M charges by INR 600 crore annually, impacting profitability by ~INR 300 crore in H1.
NEW RISK
Declining RTM revenue offsets TBCB gains
Revenue from legacy RTM projects is declining due to lower depreciation and interest, partially offsetting growth from new TBCB projects.
NEW RISK
Competitive pressure in TBCB bidding
Analyst raised concern about potential ROE compression in TBCB projects due to competitive bidding, though management downplayed the risk.
RISK GONE
Equipment supply constraints for transformers and GIS
Management acknowledged that transformers, reactors, and GIS are in tight supply, with costs rising 70-80% since 2017-18, potentially delaying projects.
RISK GONE
Cost overruns on first-of-its-kind offshore wind projects
The offshore wind evacuation projects (INR 13,100 crore total) are India's first, and management noted costs may be higher than routine projects, posing execution risk.
RISK GONE
Dividend dependency on SPVs impacting standalone profits
Analyst noted flattish standalone PAT due to lower dividends from SPVs; management confirmed this but said consolidated view is more relevant going forward.
RISK GONE
Green hydrogen transmission capacity not yet in NEP
Management could not confirm if the 125 GW RE requirement for green hydrogen is included in the National Electricity Plan, indicating potential policy uncertainty.
🤫 Topics management stopped discussing
Mentioned in Q1 FY25, Q2 FY24, Q3 FY24
Management acknowledged that transformers, reactors, and GIS are in tight supply, with costs rising 70-80% since 2017-18, potentially delaying projects.
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Guidance and risk preview
Management expects CapEx to be at least INR 18,000 crore this fiscal, with potential to exceed INR 20,000 crore.
EESL contributed a loss of INR 100 crore in H1 FY25 due to mounting receivables and interest costs, with no clear timeline for reversal.
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