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shares of power grid Friday closed 0.3% higher at ₹209.20.
Bank of America Securities said, “Given its defensive features led by an assured return-based regulated business model and our cautious outlook on macro volatility, we believe this sharp underperformance is unwarranted.”
Evaluation The brokerage said that at two-year forward book value, 1.7x is not more expensive. Bank of America Securities said transmission capex in India is peaking, which could result in power grid earnings loss. However, dividend payouts are on the rise and there is visibility of earnings from six projects worth Rs 6,700 crore running in FY12. The brokerage noted that 12 other projects worth ₹14,800 crore have pipelines under construction.
“We still find PGCIL attractive in the current environment, especially given its high return on equity of approximately 15% and attractive dividend yield of 6-7%,” Bank of America Securities said. he said.
The brokerage has seen healthy payouts and attractive dividend yields sustaining 6-7% in FY23 and FY30 periods.
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