Stock in Action – PowerGrid

PowerGrid Share Price Movement

Highlights

1. Power PSU stocks are expected to benefit.
2. Power Grid stock performance has been impressive with 78.79% rise in past year.
3. Positive sign for investors in PSU stocks.
4. Nifty50 top gainers Power Grid saw 3.6% increase, leading 50-stock index.
5. Public-sector undertaking shares recovered from last week's selloff.
6. Power Grid dividend yield stands at 2.43%, providing steady returns to investors.
7. Power Grid Q4 earnings preview indicates potential revenue & profit declines from high base of last year.
8. Transmission opportunities Power Grid keep brokerages hopeful despite competitive risks.
9. Power Grid market sentiment is mixed, with 11 brokerages giving ‘buy’ rating & 7 issuing ‘sell’ calls.
10. Investment in Power Grid shares is driven by strong capex opportunities & robust project pipeline.

Why Power Grid Stock is in Buzz?

Power Grid Corporation of Indi has recently gained significant attention in stock market, particularly following return to power with help of its allies, which investors perceive as positive sign for policy continuity in Modi 3.0. This optimism has led to recovery in shares of public-sector undertaking (PSU) companies, including Power Grid. Company's stock surged by 3.6% to ₹320.35 on NSE, making it one of top gainers on Nifty 50 index. Additionally, Power Grid's robust dividend yield & strategic expansion into telecom business through its optical ground wire (OPGW) network further bolster its market appeal.

Why Should I Invest in Power Grid Shares?

1. Policy Continuity & Government Support
Recent electoral situations, along with policy continuity expected in Modi 3.0, bodes well for PSU stocks. Investors are hopeful that government's support for infrastructure projects & energy sector reforms will continue, benefiting companies like Power Grid. return of PM Narendra Modi, along with key ministers such as Nirmala Sitharaman & Amit Shah, reinforces this sentiment.

2. Strong Market Performance & Dividend Yield
Power Grid has shown strong market performance, with its shares up 78.79% over past year & 202.60% over five years. As of May 18, stock was trading at ₹316, with dividend yield of 2.43%, making it attractive option for investors seeking both growth & income.

3. Strategic Expansion & Diversification
Power Grid has diversified its operations by leveraging its extensive transmission network for telecom business through stringing of OPGW. This strategic expansion into new revenue streams positions company for long-term growth. Additionally, appointment of Ravindra Kumar Tyagi as Chairman & Managing Director & his additional charge as Director (Projects) indicates strong leadership continuity.

4. Positive Brokerage Outlook
Many brokerages are optimistic about Power Grid's future due to substantial transmission opportunities. For instance, JM Financial projects ₹1.9 lakh crore in capex opportunities by 2032, including ISTS & international projects. Goldman Sachs anticipates 2% earnings CAGR through FY23-26, highlighting company's robust project pipeline & higher capex guidance.

5. Resilience & Long-Term Growth Prospects
Despite potential revenue & profit dip in Q4FY24, Power Grid's strong project pipeline & increased capital expenditure (capex) guidance offer visibility for long-term growth. company’s capex is driven by increased generation capacity, renewable energy projects, & focus on tariff-based projects. With market capitalization of ₹2,71,159 crore & stock rating of "overweight," Power Grid is well-positioned to capitalize on India's growing energy infrastructure needs.

6. Stable Operating Performance
Power Grid has maintained stable operating performance with improving capitalization. company’s strong focus on transmission & distribution (T&D) projects, along with government initiatives in power sector, provides solid foundation for future growth.

Conclusion

Power Grid Corporation of Indi offers compelling investment opportunity due to its strong market performance, strategic diversification, & positive outlook from brokerages. company's alignment with government policies & its robust project pipeline makes it promising choice for investors looking to benefit from India's infrastructure & energy sector growth.