Strong core transmission growth but intensity of transmission capex over next three to five years key for resurrection of sustainable growth
Q4FY23 Earnings Summary
Revenue from operations for the quarter increased by 12.5% YoY to Rs 11494.9 crore which was higher than our estimate of Rs 10876.3 crore. From a segmental perspective, core transmission revenues surprised positively by growing 15% YoY at Rs 11502.3 crore vs. our estimate of Rs10503.4 crore. Consultancy income stood at Rs 208.8 crore which was higher than our estimates as well. On a consolidated basis, revenues grew by 14.8% at Rs 12263.7 crore
Absolute EBIDTA stood at Rs 10134.5 crore vs. expectations of Rs9440.6 crore. APsrt from revenue beat, other expenses were also on the lower side at Rs686.3 crore vs. expectations of Rs815.7 crore. Even, the finance costs was lower than estimate at Rs3213.9 crore vs. estimate of Rs3304.1 crore. Consequently, PAT came in at Rs4214.4 crore vs. estimate of Rs3635.1 crore
The company also announced final dividend of Rs 4.75 per share thereby taking the total dividend at Rs 14.75 per share for FY23
ICICIdirect Research view on Power Grid Corporation of India Ltd Stock
View: The growth rates in the transmission business has settled in the single digit domain given peak of Transmission capex is behind us, which is reflective from the CWIP the company is carrying on the balance sheet. Going ahead, we believe the roadmap in terms strong intensity and early awarding of transmission capex mainly for the renewable side will help revive the growth path for the company. Also contours and execution on likely diversification in the distribution business will set the tone for growth trajectory in the medium to long term.
Impact: Positive
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