Power Grid Corporation Share Price Target at Rs 350: ICICI Securities
ICICI Securities has maintained its BUY call on Power Grid Corporation of India, trimming its target price to Rs 350 from Rs 360, which implies about 35% upside from the current market price of Rs 260. The state-run transmission utility's July-September consolidated adjusted profit rose about 11% from a year earlier to Rs 3,860 crore, while underlying revenue grew 8% even though reported revenue rose only 3%. Work in hand climbed 45% to Rs 2.2 lakh crore. Management widened its FY27 commissioning guidance to Rs 25,000-30,000 crore because of land-compensation delays, but raised capex guidance. The brokerage sees the slippage as a matter of timing.
BUY maintainedICICI Securities | Q2FY27 results updateTarget trimmed Rs 360 to Rs 350
Power Grid: A Rs 2.2 Lakh Crore Order Book Keeps the Current Flowing as Land Snags Merely Delay the Switch-On
ICICI Securities says the transmission major's softer commissioning outlook is a question of timing, not demand, and keeps a Rs 350 target on a stock that has lost 18.5% in six months.
Report dated Nov. 4, 2026 | Analysts: Mohit Kumar, Mahesh Patil, Abhinav Nalawade, Shubham Borade
Live levels on the line
CMP
Rs 260
Target
Rs 350
Upside
~35%
52-week range Rs 325 / Rs 242 | Valuation 16x FY29E EPS | Market cap Rs 2,41,400 crore
The quarter at a glance
Power Grid delivered a quarter of quiet competence. Consolidated revenue rose 3% to Rs 11,820 crore, EBITDA climbed 6.7% to Rs 9,720 crore and the margin widened by about 284 basis points to 82.3%. Adjusted profit rose 10.6% to Rs 3,860 crore, even though the tax rate nearly doubled to 15.4% from 8%.
| Rs crore | Q2FY27 | Q1FY27 | Q2FY26 | YoY | QoQ |
|---|---|---|---|---|---|
| Revenue | 11,820 | 11,500 | 11,480 | +3.0% | +2.8% |
| EBITDA | 9,720 | 9,540 | 9,110 | +6.7% | +1.9% |
| EBITDA margin | 82.3% | 82.9% | 79.4% | +284 bps | -69 bps |
| Depreciation | 3,200 | 3,130 | 3,220 | -0.9% | +2.1% |
| Finance cost | 2,190 | 2,020 | 2,150 | +2.0% | +8.3% |
| Profit before tax | 4,570 | 4,590 | 3,880 | +17.8% | -0.4% |
| Tax rate | 15.4% | 21.6% | 8.0% | +733 bps | -618 bps |
| Adjusted PAT | 3,860 | 3,620 | 3,490 | +10.6% | +6.8% |
| Reported PAT | 3,870 | 3,600 | 3,570 | +8.4% | +7.4% |
Consolidated figures. Source: ICICI Securities, company data.
Why 3% revenue growth undersells the quarter
Line-loss bridge: underlying to reported revenue growth
+8%
-3%
-1.7%
+3%
Underlying
Regulatory
One-offs
Reported
Bars drawn to scale from the components ICICI Securities prints; they add to about 3.3%, rounded to 3%.
The regulatory drag is structural. About 3 percentage points of the gap comes from lower depreciation booked on mature cost-plus projects. As regulated assets age, that tariff component shrinks.
The one-offs will not repeat. Another 1.7 points reflects a year-on-year fall in interest on differential tariff, as fresh regulatory orders approved higher tariffs.
The 8% is the real signal. Strip out both items and revenue grew about 8%, reflecting strong recent capitalisation.
An order book about eight times last year's capitalisation
The industry backdrop is exceptionally strong. Tariff-based competitive bidding (TBCB) awards have crossed Rs 3.4 lakh crore in the past 30 months, with a record Rs 1.4 lakh crore awarded in the first half of FY27 alone. Power Grid's work in hand has grown about 2.5 times over the same 30 months and 45% in the past year.
Conductor spans: pipeline vs. delivery
Sector TBCB awards, past 30 months Rs 3.4 lakh cr
Power Grid work in hand, September 2026 Rs 2.2 lakh cr
Sector bid awards, H1FY27 Rs 1.4 lakh cr
Power Grid capex, past 18 months Rs 57,000 cr
Power Grid capitalisation, past 18 months Rs 38,000 cr
Span lengths are proportional to the figures ICICI Securities prints.
- Mix: TBCB projects make up Rs 1.95 lakh crore of the order book and cost-plus projects Rs 25,000 crore.
- Not yet counted: the Rs 31,000 crore Pang-Kaithal scheme is excluded while it is converted from HVDC to EHVAC technology.
- Fresh wins: first-half bids added projects worth about Rs 8,100 crore in annual tariff, including about Rs 3,240 crore from the Barmer HVDC link.
- What comes next: the brokerage expects capex to rise to about Rs 50,000 crore in FY28.
Two steps forward, one step back on commissioning
Execution is running hot. Second-quarter commissioning reached about Rs 4,000 crore, 1.8 times the year-earlier level, taking first-half commissioning to Rs 9,300 crore, up 2.4 times. Quarterly capex rose to Rs 9,100 crore from Rs 8,400 crore, and first-half capex rose 10%. The one soft spot is land: states are gradually adopting revised land-compensation guidelines, which could cause temporary delays.
FY27 guidance bus-bars (scale Rs 20,000 to Rs 45,000 crore)
Commissioning: widened to Rs 25,000-30,000 crore from Rs 30,000 crore
Capex: raised to Rs 37,000-40,000 crore from Rs 37,000 crore
Coloured band = new range; dark tick = earlier guidance. The commissioning mid-point is 8% lower than before, while the capex range moves up. ICICI Securities reads the gap as "a matter of timing."
Estimates cut, but the target barely moves
Based on first-half performance, ICICI Securities has cut its earnings forecasts by 10.3% for FY27 and 15.1% for FY28. The target falls only Rs 10 because the brokerage rolls its valuation forward a year to FY29 estimates at an unchanged 16 times earnings.
| Rs crore | FY26A | FY27E | FY28E | FY29E |
|---|---|---|---|---|
| Revenue | 46,733 | 48,587 | 51,761 | 56,916 |
| EBITDA (margin) | 38,422 (82.2%) | 40,639 (83.6%) | 43,115 (83.3%) | 47,839 (84.1%) |
| Adjusted net profit | 15,434 | 15,812 | 17,410 | 19,778 |
| Adjusted EPS (Rs) | 16.6 | 17.0 | 18.7 | 21.3 |
| P/E (x) | 14.7 | 15.3 | 13.9 | 12.2 |
| Dividend per share (Rs) / yield | 9.1 / 3.5% | 8.4 / 3.2% | 8.8 / 3.4% | 10.1 / 3.9% |
| RoE / RoCE | 17.0% / 9.7% | 15.2% / 8.7% | 15.8% / 8.5% | 16.8% / 8.5% |
| Net profit vs. earlier estimate | - | -10.3% (from 17,626) | -15.1% (from 20,507) | New |
Revenue estimates were cut 6.7% for FY27 and 9.5% for FY28. Source: ICICI Securities.
Substation bays: how the target is built
Bay 1
FY29E EPS Rs 21.3
PAT Rs 19,778 cr
Bay 2
x 16 P/E
multiple unchanged
Output
Rs 350
per share
The printed equity value is Rs 3,25,900 crore. See the Editor's note on the arithmetic.
Target for investors: ICICI Securities' 12-month target of Rs 350 implies about 35% upside from Rs 260. Add an estimated FY27 dividend yield of about 3.2%.
Entry context: the shares trade much closer to their 52-week low of Rs 242 than to the high of Rs 325. They are down 9.9% over a year and trade at 13.9 times FY28 earnings.
Who owns it: the promoter holds 51.3%. Foreign investors trimmed their stake to 24.0% from 25.0% in March, while mutual funds and others raised theirs to 14.5% from 13.6%.
What could trip the circuit
TRIP | Printed downside
Project execution delays. Land-compensation changes are already pushing out FY27 commissioning.
TRIP | Printed downside
Slower project awards. Any slowdown in new tenders would weaken the order-book momentum behind the call.
CLOSE | Printed upside
Faster commissioning or richer margins. Either would lift earnings above the reduced estimates.
TopNews watch
Rising leverage. Borrowings are modelled to climb to Rs 2,38,696 crore by FY29, lifting net debt to 4.6 times EBITDA from 3.8 times, while RoCE eases to 8.5%.
Editor's note
1. Target arithmetic. The valuation table applies 16 times to FY29E profit of Rs 19,778 crore, which works out to about Rs 3,16,400 crore, or roughly Rs 340 a share at an EPS of Rs 21.3. The table instead prints an equity value of Rs 3,25,900 crore and Rs 350 a share. TopNews reports the published Rs 350 target.
2. Free cash flow. The cash-flow statement shows free cash flow (Rs 64,583 crore in FY26) higher than operating cash flow (Rs 39,783 crore), which suggests capex was added rather than subtracted. Operating cash flow minus capex gives about Rs 14,984 crore in FY26 and Rs 11,069 crore in FY27E, and turns negative in FY28E and FY29E.
3. FY27 EPS growth. The report prints FY27E EPS growth of -3.7%, but adjusted EPS rises to Rs 17.0 from Rs 16.6, about +2.4%. The negative figure appears to use a reported FY26 EPS of Rs 17.7, which does not match reported FY26 profit of Rs 15,928 crore (about Rs 17.1 a share).
4. Smaller points. The earnings-revision table labels its change columns "YoY (%)", but they show the change against earlier estimates. The text expects FY28 capex of about Rs 50,000 crore, while the cash-flow statement models Rs 43,106 crore, possibly on a cash rather than accrual basis.
Sources
ICICI Securities, Power Grid Corporation of India Q2FY27 Results Update, Nov. 4, 2026; Power Grid Corporation of India company data; Bloomberg. Figures converted into crore and lakh crore; charts drawn from the brokerage's printed figures.
Disclaimer: This TopNews Stock Market Report is based on a brokerage research report and is for information only. It is not investment advice. Investments in securities markets are subject to market risks; read all related documents carefully and consult a registered financial adviser before investing.
