MOSL: POWER GRID (Buy)-Growth in transmission to continue
Power Grid: Growth in transmission to continue
(PWGR IN, Mkt Cap USD14.0b, CMP INR192, TP INR244, 27% Upside, Buy)
We attended Power Grid (PWGR)’s analyst meet. Below are the key takeaways:
Transmission sector to grow 8-9% over the next 10 years
- PWGR has noted that India’s current low per capita electricity consumption (1/3rd of the world average) and focus on renewable energy (RE) investment will necessitate growth in transmission works.
- INR478b worth transmission projects corresponding to ~70GW of RE capacities have been identified for awarding. Of this, INR147b has been allocated to regulated tariff mechanism (RTM) and tariff-based competitive bidding (TBCB) projects, while the balance is up for allocation.
- From a longer-term perspective, company believes that India’s vision to reach 450GW of RE capacity by 2030 (from est. 175GW in 2022) would necessitate incremental investments of INR2.8t within transmission. By and large, PWGR expects the transmission sector to grow at 8-9% over the next 10 years.
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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