PowerGrid Corporation jumps 5% to record high in volatile market

Shares of PowerGrid Corporation hit a record high of Rs 223.35, after rising 5% on BSE during Tuesday’s intraday trading amid heavy volumes. The share of the state-owned power utility company has surpassed its previous high of Rs 220.85 reached on January 27, 2022.

At 10:16 a.m.; the stock rose 1.3% to Rs 215.90, against a gain of 0.30% on the S&P BSE Sensex. Over-the-counter trading volume jumped 1.3x with a combined total of 9.3 million shares changing hands on the NSE and BSE.

PowerGrid Corporation is India’s leading power transmission company, operates primarily in the interstate transmission sector and is one of the largest transmission companies in the world. The company’s robust and extensive electricity transmission network (as well as its subsidiaries acquired through tariff-based tendering) as well as other business segments, namely telecommunications, consulting, etc.

The Government of India under the National Infrastructure Pipeline (NIP) has projected a per capita consumption of 1,616 kWh by 2025. In addition, the draft National Energy Policy (NEP) released by the government in June 2017 foresees that the The country’s annual per capita electricity consumption will increase to 2,911 – 2,924 kWh by 2040.

The Renewable Energy (RE) sector in India is emerging as a major player in grid-connected power generation capacity and it is poised to play a much larger role in achieving energy security in the coming years. to come and is an integral part of energy planning. to treat.

Growing demand for electricity due to the government’s focus on improving the distribution sector – the last mile of electricity; adding RE capacity; adding capacity to conventional generation sources; Cross-border linkages and adoption of new technologies to meet the challenges of integrating renewable energy are likely to be the drivers of power transmission growth in India.

Management had indicated that projects worth Rs 23,000 crore-plus (mostly tariff-based tenders or TBCBs) are likely to be tendered during the l FY23 as renewable energy projects pick up.

“Overall, transmission offerings are expected to accelerate from FY23, which bodes well for Power Grid Corporation. Additionally, the company is likely to explore the buyback option as its leverage has decreased (D/E now at 1.6x). This, combined with a dividend yield of 5% and 1.6x P/BV, makes it an attractive play,” Edelweiss Securities analysts said. The brokerage maintains a ‘buy’ rating on the stock with a target price of Rs 242 per share.

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