Power Grid Q3 Results: Net Profit Declines 4% Despite Dividend Announcement
Power Grid Corporation of India, a Maharatna Central Public Sector Undertaking (CPSU), announced its Q3FY25 results, revealing a 4% drop in net profit to ₹3,861.6 crore. This decline was attributed to weak demand during the October-December quarter. Despite the profit dip, the company declared an interim dividend.
Key Financial Highlights
Here's a summary of Power Grid's Q3FY25 financial performance:
- Net Profit: ₹3,861.6 crore (down 4% YoY)
- Revenue from Operations: ₹11,233 crore (down 3% YoY)
- Total Income: ₹11,743.06 crore (down from ₹11,819.70 crore YoY)
- Expenses: ₹6,828.65 crore (down from ₹7,076.49 crore YoY)
The revenue from operations decreased by 3% to ₹11,233 crore, compared to ₹11,579.8 crore in the same period last year. Power Grid shares closed 2.09% lower at ₹283.90 apiece on the BSE following the results announcement.
Interim Dividend Announcement
Despite the lower profit, Power Grid's board approved a second interim dividend of ₹3.25 per equity share of ₹10 each, amounting to 32.50% of the paid-up equity share capital for FY25. The dividend will be paid on February 28, 2025, with a record date set for February 7, 2025.
Investment Approval
The board also approved an investment for the "implementation of LILO (Line In Line Out) of both circuits of 400kV Vindhyachal PS' Sasan D/C line at Hindalco Switchyard" at an estimated cost of ₹370.02 crore. This project is expected to be commissioned within 30 months from December 2026.
Analysts' Views and Future Growth Drivers
Previously, Motilal Oswal initiated coverage on Power Grid with a ‘buy’ rating and a target price of ₹425. The brokerage highlighted India’s ambitious renewable energy expansion goals and the company's role in key energy initiatives as growth drivers. Specifically, they pointed to India's goal to expand its renewable energy capacity to 500 GW by 2030, along with upcoming battery storage and pumped hydro projects, and the nation’s aspirations to participate in global energy initiatives like ‘One World, One Grid.’
Factors Impacting Q3 Results
The decline in net profit and revenue was primarily attributed to weaker demand during the third quarter. Despite reduced expenses, the overall performance was impacted by these demand-side challenges.
Key takeaways:
- Power Grid's Q3 net profit decreased by 4% YoY.
- Revenue from operations also saw a 3% decline.
- An interim dividend of ₹3.25 per share was declared.
- Investment approved for LILO project at ₹370.02 crore.
- Analysts remain positive on Power Grid's long-term growth prospects.
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