Power Grid stock slips ~2.5% despite staying clear of Covid-19 impact in FY20

During lockdown the company implemented digital solutions such as E-office, ERP systems etc. to facilitate Work from Home of its employees.

Jul 30, 2020 01:07 IST India Infoline News Service

PowerGrid
Power Grid Corporation of India Limited updated the exchanges Wednesday that there has been no material impact on operations or profitability of the company during Financial Year 2019-20 due to the Covid-19 pandemic.

The company's stock is currently trading at Rs177.40, down by Rs4.4 or 2.42% from its previous closing of Rs181.80 on the BSE.

The company is mainly engaged in the business of transmission of electricity and the tariffs for the transmission services are regulated in terms of the CERC Tariff Regulations which provide for recovery of the annual transmission charges based on system availability.

Due to the Covid-19 pandemic, a lockdown was announced by the Government of India effective from March 25, 2020. As per the Government guidelines, transmission units and services were exempted from the lockdown. The company has issued guidelines and protocols to be followed by its various units for the operation and maintenance of its transmission network during the pandemic.

The company has also implemented digital solutions such as E-office, ERP systems, Virtual Private Network, Video Conferencing etc. to facilitate Work from Home of its employees. Due to the various steps taken by the company, there has been no significant impact due to the pandemic on the availability of the transmission system of the company.

Due to the lockdown, there has been a general fall in the demand for electricity in the country and the revenue realisation of the distribution utilities has been adversely impacted. As a result, delay in realisation of transmission charges from the customers is expected in the next financial year.

“The Government of India has announced measures to facilitate the liquidation of outstanding dues of the utilities to the generators and transmission licensees which are expected to facilitate the realisation of the company's trade receivables.

Further, the company has adequate credit limits and strong credit ratings to mobilise the required short term funds for its operations including for meeting its debt service obligations. The company has also approved a consolidated onetime rebate of~ 1,075crore to the DISCO Ms and Power Departments of States I Union Territories against the billing of April 2020 and May 2020,” the company had revealed in its financial results earlier.

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