Power Grid Corporation of India (PGCIL) has drawn a fresh vote of confidence from ICICI Securities, which has maintained its BUY rating with a 12-month target price of Rs 361, implying a potential 22% upside from current levels. The reaffirmation is grounded in the utility’s dominant position in India’s transmission space, a bulging execution pipeline worth over Rs 1.55 trillion, and expected capitalisation-led earnings growth. While near-term delays persist due to right-of-way (RoW) constraints, PGCIL’s long-term fundamentals remain unshaken as India marches toward aggressive renewable energy (RE) targets.

Strong Order Wins Secure Long-Term Revenue Visibility

PGCIL won 24 TBCB (tariff-based competitive bidding) projects in FY25, commanding over 50% market share, with a project value of approximately Rs 920 billion. This includes marquee wins such as the Khavda-Nagpur HVDC corridor (Rs 250 billion) and multiple green energy evacuation networks across Rajasthan and Gujarat.

These wins significantly bolstered the company’s execution pipeline to Rs 1.55 trillion, a 1.8x increase year-on-year. Given India’s stated capex plan of Rs 6 trillion in transmission infrastructure by FY32, Power Grid is expected to remain a critical player in the sector’s transformation.

Capex Surges Ahead, But Capitalisation Misses

FY25 capex stood at Rs 263 billion, exceeding the mid-year guidance of Rs 200 billion. However, capitalisation fell short at Rs 90 billion vs an earlier target of Rs 180 billion, due to RoW issues and manpower shortages.

The company now anticipates these deferred assets will be commissioned in H1FY26, with guidance for capitalisation in FY26 revised to Rs 230–250 billion. Capex plans for the next three fiscal years are aggressive:

Q4FY25 Results: Stable Despite Execution Delays

Revenue for Q4FY25 grew 2.5% YoY to Rs 122.8 billion, while EBITDA came in at Rs 102.2 billion, up 1.2% YoY.

Adjusted PAT stood at Rs 40.9 billion, marginally lower than last year due to increased finance costs and deferred capitalisation. Nevertheless, EBITDA margins held firm at 83.3%, reflecting cost efficiency and scale.

The standalone performance was even stronger, with Q4 EBITDA growing 2.7% YoY to Rs 92.1 billion and PAT at Rs 42.9 billion.

Key Assets Commissioned in FY25

PGCIL operationalised several critical projects across substations and transmission lines:

Substations Commissioned:

765/400kV Sikar-II (constructed in under 10 months)

765/400kV Navsari – India's first remotely testable digital substation

765/400/220kV Kurnool–II and 400/220kV Navi Mumbai

Transmission Lines Operationalised:

Khavda Pooling Station-II (KPS-II) to Sikar-II to Aligarh (765 kV DC)

Jamnagar to Jam Khambaliya, Raipur Pool to Dhamtari (400 kV DC)

Financial Performance and Valuation Metrics

The company's financial foundation remains strong with healthy profitability and controlled leverage.

Strategic Leverage from India’s Renewable Ambitions

India’s push toward adding 400GW of renewable capacity by 2030 translates to exponential demand for grid expansion. With most renewable installations located in remote regions, transmission infrastructure will be the backbone of RE integration.

Power Grid is poised to benefit significantly as the government's preferred partner for high-stakes, strategically critical projects, including the Leh transmission corridor and other high-voltage installations.

Risks and Catalysts for Re-rating

Key Risks:

Project delays due to RoW and regulatory hurdles.

Delay in new project awards from the government.

Key Upsides:

Faster-than-expected commissioning of deferred assets.

Margin expansion from operational leverage as assets go live.

Valuation and Investment Levels

ICICI Securities values Power Grid at 18x FY27E EPS, deriving a target price of Rs 361 per share, which represents a 22% upside from current levels.

Support level: Rs 280
Resistance level: Rs 340
Buy Zone for Investors: Rs 295–305

Conclusion: Power Grid Remains the Backbone of India's Energy Future

Power Grid’s consistent track record, vast project pipeline, and critical role in the renewable energy buildout position it as one of India’s most reliable infrastructure plays. Despite near-term challenges, the stock offers visibility, dividend yield, and stability, especially for long-term investors seeking exposure to the country’s evolving energy narrative.

With capex momentum building and commissioning slated to rise sharply in FY26, the risk-reward remains compelling. ICICI Securities' BUY call, paired with a Rs 361 target, underscores Power Grid as a power play that delivers—quite literally—on all fronts.