Power Grid wins bid for UP transmission line project; Stock up ~1%

This is the first intra-state transmission system project won by the company under tariff-based competitive bidding, the company stated in its filing.

Dec 06, 2018 04:12 IST India Infoline News Service

Power Grid
Shares of Power Grid Corporation of India gained in the morning session today after it bagged a project to set up a transmission system for evacuating electricity from the 1,320MW Jawaharpur thermal power project and construct a substation in Uttar Pradesh.

“Power Grid has been declared as the successful bidder under Tariff based competitive bidding to establish the transmission system for evacuation of power from 2 x 660MW Jawaharpur Thermal Power Project and construction of 400kV substation at Firozabad along with associated Transmission Lines' on build-own-operate-maintain (BOOM) basis,” the company said in a filing to the exchanges after-market hours on Wednesday.

The project is an intra-state transmission system in Uttar Pradesh and comprises 765kV. 400kV, 220kV, and 132kV lines apart from establishing a new 400/220/132kV substation at Firozabad in Uttar Pradesh, as per the filing. This is the first intra-state transmission system project won by the company under tariff-based competitive bidding, the company stated in its filing.

The Letter of Intent (LoI) has been received by the company on Wednesday.

Power Grid Corporation of India Ltd is currently trading at Rs184.55, up 0.63% from its previous closing of Rs183.40 on the BSE. The scrip opened at Rs185 and has touched a high and low of Rs185.60 and Rs183.60 respectively.

Power Grid Corporation of India Ltd (PGCIL), a PSU power transmission company, is likely to benefit from healthy capitalization of ~Rs27,000cr per annum (over FY18-20E) leading to revenue CAGR of 12.3% over the same period. This revenue growth is likely to lead to PAT CAGR of 18.6% over FY18-20E with an EBITDA margin of 88.3% in FY20E. The stock is currently trading at 8.3x FY20E EPS.

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