Power Grid Corporation of India (PWGR IN) – Company Update – Capitalization momentum re-emerges post curtailment – BUY
Published on 03 Feb 2026
Power Grid’s (PWGR) capitalization in Q3FY26 significantly exceeded Street expectations, coming in 80-90% higher than anticipated. The strong outperformance was driven by concerted ministry-level interventions to address the right of way (RoW) challenges, alongside the adoption of insulated cross arm (ICA) technology, which helps reduce RoW requirements by 30–40%. Post Q3FY26, PWGR has raised its FY26E/FY27E capitalization guidance by 10–15%. On the growth front, the transmission bidding pipeline remains strong. Out of the ~Rs6.6trn ISTS opportunity, projects worth ~Rs2.4trn have already been bided and ~Rs700bn are at various stages of bidding and approvals. This implies an annual bidding opportunity of ~Rs900bn over the medium term. PWGR has orders worth Rs1.45trn in hand, and to execute these, it has outlined a robust multi-year capex plan of Rs320bn in FY26E, Rs370bn in FY27, and Rs450bn in FY28. Capitalization is expected to ramp up with a 2-year lag, rising from ~Rs220bn in FY26 to ~Rs350bn by FY28. Given its dominant market position, regulated return profile, strong capex visibility, and healthy dividend yield of 3–3.5%, PWGR remains the best proxy to play India’s transmission capex upcycle. We value it at 2.6x FY28E P/B, implying TP of Rs324 with ‘BUY’ recommendation.
