MOSL: POWER GRID (Buy)-One-offs offsets impact of receivable provisioning-Valuation attractive
Power Grid: One-offs offsets impact of receivable provisioning; Valuation attractive; Maintain Buy
(PWGR IN, Mkt Cap USD14.3b, CMP INR190, TP INR233, 22% Upside, Buy)
4QFY19 standalone (S/A) reported PAT grew 52% YoY to INR30.5b, boosted by prior-period sales and other likely one-offs on annual tariff adjustments. For FY19, S/A reported PAT rose ~21% YoY to INR99.4b even as gross block (proxy for regulated equity) grew by ~12% YoY. The growth was aided by prior-period revenue of ~INR2.8b and other one-offs.
- S/A capitalization stood at INR192b in FY19 (INR64b in Q4FY19) v/s INR273b in the previous year. Group capitalization stood at INR258b.
- PAT of TBCB companies increased INR1.5b YoY to INR1.9b in FY19 on commissioning of three projects (to seven now) and a weaker base.
- PAT grew by a healthy 22% YoY to INR100.3b, led by a 15% YoY increase in gross block and a weaker base in TBCB.
Power Grid Corp. of India is a power transmisson utilities company. Co. is engaged in the planning, coordination, supervision and control over inter-state transmission system and operation of national & regional power grids. Co.'s Power System Management business takes continuous action regarding operation and maintenance to seek to ensure compliance with prescribed standards as well as to achieve high availability of the system. In the telecom business, Co.'s brand name "POWERTEL" is the only utility in India having an overhead optic fiber network using optical ground wire on power transmission lines.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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