Company Update : Power Grid Ltd by Motilal Oswal Financial Services Ltd
Earnings miss estimates due to higher other expenses
Standalone (SA) Performance:
* In 2QFY26, Power Grid (PWGR) reported SA revenue of INR100b (-3% YoY,+1% QoQ), missing our estimate by 6%. EBITDA was 13% below our estimate at INR80.1b (-9% YoY, -1% QoQ), hit by a 55% YoY growth in other expenses.
* Reported PAT came in 4% below our estimate at INR35.5b (-4% YoY, - 3% QoQ), supported by higher-than-expected other income, lowerthan-expected depreciation (likely due to lower capitalization), and positive net movement in regulatory deferral account balances of INR5.2b.
* Adj. PAT was 16% below our estimate at INR.31.2b (-11%YoY,-10% QoQ), mainly due to a miss at the EBITDA level.
Consolidated Performance:
* Consolidated operating revenue came in at INR114.76b, improving 2% YoY, while reported PAT declined ~6% YoY to INR35.7b.
* The transmission segment remained the primary revenue driver, contributing 92% of total income (INR116.7b).
* In 2QFY26, its JVs reported a loss of INR0.6b (vs. a loss of INR1b/INR0.4b in 2QFY25/1QFY26).
Other Matters:
* The Board of Directors approved the payment of the first interim dividend of INR4.5/share.
* The Board further approved raising of funds through an unsecured rupee term loan/line of credit up to INR60b from SBI.
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SEBI Registration number is INH000000412
