Power Grid Corporation of India Ltd: 4QFY26: Multi-year visibility

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Power Grid Corporation of India Ltd: 4QFY26: Multi-year visibility

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Power Grid Corporation of India Ltd

4QFY26: Multi-year visibility

Reiterate Rating: BUY | PO: 340.00 INR | Price: 296.55 INR

4Q: Earnings decline 8% YoY on allowed ROE reset 18 May 2026

PGCIL’s recurring earnings declined ~8% YoY, missing street estimates by 4%, primarily Equity

due to a meaningful portion of regulatory (RTM) assets crossing the 10-12-year

threshold which led to a reset allowed RoE to 15.5% (vs. 16% with incentives for timely

Key Changes

completion), resulting in lower tariff realization and earnings decline in 4Q.

(Rs) Previous Current

2026E Rev (m) 492,086.8 467,328.7FY26 guidance exceeded; could continue to see beats

For FY26, the company exceeded guidance, achieving Rs282bn of capitalization (vs. 2027E Rev (m) 512,942.9 530,173.3

Rs220bn) and deploying Rs400bn in capex (vs. Rs350bn). Management retained FY27 2028E Rev (m) 551,380.8 573,771.9

guidance at Rs300bn of commissioning and Rs370bn of capex. That said, management 2026E EPS 17.18 15.21

remains optimistic about delivering a similar beat to FY27 guidance, supported by easing 2027E EPS 18.77 18.41

RoW issues driven by revised compensation norms and innovative solutions. We 2028E EPS 19.91 19.70

estimate capex and commissioning to broadly meet management’s guidance.

Amish Shah, CFA >>

LT outlook remains positive; see multi-year visibility ResearchBofAS IndiaAnalyst

Management highlighted strong visibility over the next few years, supported by a) +91 22 6632 8656

shah.amish@bofa.com

Rs1.7tn of works-in-hand, and b) Rs1.1tn of tariff-based competitive bidding (TBCB)

assets under bidding. Since inception, PWGR has achieved a ~44% TBCB market share. UditResearchDhekaleAnalyst>>