Summary
Power Grid Corporation of India Limited - Q3 FY 2025-26 Earnings Call Summary Monday, February 02, 2026 11:00 AM
Event Participants
Executives 6 Burra Vamsi Rama Mohan (Director Projects), G. Ravisankar (Director Finance & CFO), L. K. Khajkumar (ED Corporate Planning), Naveen Srivastava (Director Operations), Dr. R. K. Tyagi (Chairman & Managing Director), Dr. Yatindra Dwivedi (Director Personnel)
Analysts 8 Apurva (IIFL), Girish (Morgan Stanley), Mohit Kumar (ICICI Securities), Murtuza (Kotak), Namit Arora (InGrowth Capital), Nikhil (Bernstein), Prateek (ICICI Prudential), Shirom Kapoor (Jefferies), Shubhdeep (Nuvama), Sumeet Kishore (Axis Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Gross Fixed Assets | ₹3,04,336 crores | +5.6% YoY on consolidated basis; Crosses the ₹3 trillion milestone for the first time. |
| Total Income (Consol) | ₹12,599 crores | +7% YoY; Driven by steady transmission revenue and growth in consultancy/telecom segments. |
| PAT (Consol) | ₹4,185 crores | +8% YoY; Reported steady growth despite the absence of one-time income items seen in previous cycles. |
| Capital Expenditure | ₹26,761 crores | +51.6% YoY for 9M FY26; Massive acceleration from ₹17,651 crores in 9M FY25. |
| Capitalization | ₹12,915 crores | +74% YoY for 9M FY26; Major recovery in execution following resolution of RoW issues. |
| Transmission Availability | 99.84% | Maintained at world-class levels; Reliability at 0.21 annual trippings per line. |
| Debt/Equity Ratio | 59:41 | Maintained from prior periods; Reflects disciplined capital structure despite higher capex. |
| Net Worth | ₹98,906 crores | +8.7% YoY; Growth supported by internal accruals and capital appreciation. |
Geographic & Segment Commentary
- Domestic Transmission: Backbone network reached 1,83,174 ckm and 5,99,016 MVA capacity as of Dec 2025. Focus remains on Green Energy Corridors (GEC) with major project completions in Rajasthan and Gujarat (Khavda region) for RE evacuation.
- Telecom & Consultancy: Telecom income grew to ₹879 crores for 9M with a 1 lakh km network; Consultancy revenue saw a significant jump to ₹1,173 crores (vs ₹427 crores YoY). The company now has consultancy footprints in 25 countries.
- International (Kenya): Entered a first-of-its-kind $311 million PPP partnership with Africa50 for two 400kV/220kV transmission projects in Kenya. This serves as a template for further IPP-model expansion across Africa.
Company-Specific & Strategic Commentary
- Renewable Energy Integration: Achieved the target of meeting 50% of internal power consumption through renewable sources via rooftop solar and the 85 MW Nagda plant.
- Operational Efficiency: Procured mobile GIS substations (220kV, ordered 400kV/132kV) for rapid disaster recovery and emergency restoration.
- Supply Chain De-risking: Implementing bulk procurement of transformers (30 units per package) ahead of project wins to mitigate the 4,21,000 MVA demand-supply gap in the industry.
- ESG Initiatives: Commissioned Asia’s first 315 MVA transformer using biodegradable synthetic ester oil at Bhiwadi, enhancing fire safety and environmental compliance.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY26 Capex | ₹32,000 crores | Revised upward from ₹28,000 crores due to accelerated site progress. |
| FY27/28 Capex | ₹37,000 / ₹45,000 crores | Escalation driven by HVDC projects and massive TBCB pipeline. |
| FY26 Capitalization | ₹22,000 crores | Revised upward from ₹20,000 crores; Supported by improved RoW guidelines. |
| FY27/28 Capitalization | ₹30,000 / ₹35,000 crores | Driven by several large-scale TBCB projects entering commissioning phase. |
| Opportunity Pipeline | ₹6,60,000 crores by 2032 | Includes ₹3,60,000 crores of projects yet to be bid out; Expecting ₹90,000 crores avg. annual bidding. |
Risks & Constraints
| Risk | Context |
|---|---|
| Supply Chain (Transformers) | Material shortage of transformers and reactors; Management is engaging with OEMs and hoping for government relaxation on component imports to meet the FY27 demand. |
| Right of Way (RoW) | Historically a major pain point; Mitigated by new Dec 2025 guidelines and a dedicated RoW cell monitoring tower-by-tower progress at the CMD level. |
| Specialized Manpower | Shortage of skilled fitters for transmission work; Mitigation includes launching 4 skill development centers to train 800 fitters annually. |
Q&A Highlights
Capitalization Acceleration
- Question: What explains the sudden jump in capitalization in Q3 versus previous quarters? (Prateek, ICICI Prudential)
- Answer: Modification of RoW guidelines in 2025 led to states like Haryana, Rajasthan, and Gujarat adopting market-rate compensation, allowing work to resume in Sept-Oct. Major projects like Khetri-Narela and Ahmedabad-Lakadia have now been commissioned (Dr. R.K. Tyagi).
HVDC Pipeline
- Question: What is the status of large-scale HVDC projects and their impact on future Capex? (Sumeet Kishore, Axis Capital)
- Answer: Two major LCC projects (Barmer II-South Kala Amb and Bikaner V-Begunia) worth ~₹70,000 crores are expected to be awarded in FY27. These will drive the ₹45,000 crore capex target for FY28 as equipment supplies commence (Dr. R.K. Tyagi).
Battery Energy Storage (BESS)
- Question: How does the company view the battery storage opportunity and the CERC draft on RTM inclusion? (Apurva, IIFL)
- Answer: Power Grid won its first TBCB BESS project in Andhra Pradesh (150 MW/350 MWh). If CERC approves storage under the Regulated Tariff Mechanism (RTM) for grid stability, it could represent 10-15% of total generation capacity requirements (Dr. R.K. Tyagi).
Market Share & Competition
- Question: What is the current market share in TBCB and the mix of RTM vs TBCB in the backlog? (Girish, Morgan Stanley)
- Answer: Power Grid maintains a 50-60% market share in interstate TBCB. The works-in-hand (~₹1.45 lakh crores) is roughly 80-90% TBCB, as RTM projects (excluding Leh-Pang) currently total only ~₹10,000 crores (Dr. R.K. Tyagi & B.V. Rama Mohan).
Key Takeaway
Power Grid delivered a strong Q3 FY26, characterized by a massive 74% YoY jump in 9M capitalization (₹12,915 crores) and a 51.6% surge in Capex, following the resolution of historical Right-of-Way (RoW) bottlenecks. The company has officially raised its FY26 Capex guidance to ₹32,000 crores and provided an aggressive roadmap reaching ₹45,000 crores by FY28, underpinned by a ₹1.95 lakh crore total project pipeline. Strategically, the firm is pivoting toward High Voltage Direct Current (HVDC) systems and Battery Energy Storage (BESS) while maintaining a dominant 50-60% market share in TBCB bidding. Despite supply chain constraints in transformers, management’s proactive bulk procurement and mechanized construction techniques are expected to sustain high execution rates. The company remains the primary beneficiary of India’s 600 GW non-fossil capacity target by 2032, with an estimated ₹90,000 crore annual bidding opportunity.
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