Stock Analysis of Power Grid Corporation: Buy, Hold, Sell?

This article is all about stock analysis of power grid corporation. Recently the company has declared quarterly results we will see what to do with this stock? Either buy, hold or sell and at what level. Recently power grid declared its quarterly results for the quarter ending on March. Results are encouraging net sales stand at 10,148.26 Cr which is 6.43% up from last years the same quarter which was 9535.12 Cr.

Stock Analysis Of Power Grid Corporation

Let’s look at profit after tax it went up by 17% compared to last quarter 3265.59 Cr as compared to 2541.58 Cr of last quarter on yearly basis it went up by 8 % or 3313.47 Cr. Let’s look further into how stock performed as per analyst expectations.

Analyst expectation was beaten by 15 % PAT was 15 % higher than analyst expectation which is really good signal means stock is performing well let move on and see whats next lets look at EPS last quarter in March 2019 it was 5.85 Rupees and now it became 6.33 Rupees in current quarter.

Lets look at dividends final dividend is 4.04 Rupees per share Interim dividend was 5.96 Rupees per share on 21st March Total dividend was 10 rupees per share for the year 2020. Lets look at segment wise revenue transmission business revenue was 10,100.98 Cr in Q4 2020 which was 9339.79 Cr in Q4 2019. Its good increase in last quarter same quarter and current quarter 9%.

Increase is noticed revenue in consultancy and telecom business remain almost flat at 174.10 Cr and 191.5 Cr let move forward Lets see what management said as per management due to covid 19. No impact will be on this stock and no impact on profitability as per management due to lockdown.

Their is drop in electricity demand and its effect group has enough money to cover its debt for short term and group has good credit ratings and group has provided one time rebate of 1075 Cr to discoms and to state govts for the month of April 2020 & May 2020.

Lets look at the stock in detail. Stock’s market cap was 93,436 Cr current price is 178.60 Rs, P/E is 8.45 and industry PE is 11.06. Debt is high due to power distribution company but debt to equity is 2.14 which is not concerning as it needs hugh money for infra investment return on equity is 22.16 %.

Sales growth for last 5 years in 17.65 % profit growth for 5 years is 22.38 %. Rs 59,464 Cr reserves and networth of 64,695 Cr. Lets go to tickertape 1 day return was 4.95, % 1 week return is 9 %, one point it went really low but now it have recovered in 1 year return in the month of march.

When markets were bottomed out then the stock went down till 144.15, after that, it went really up and recovered well and on 22nd June 2020 dividend returns are really well entry point of the stock is also very good. Stock is not in overbought zone.

Continuous increase in revenue from 2017 till 2020 and similarly for profit which was 7.45 % in June 2017. Now is 11.05% decrease in total promoter holding due to govt selling but it is not a matter of concern lets look at the forecast in high range it can go till 245 in median range.

It can go till 210 and it low range it can go till 170 similarly good forecastings for earning per share at high range, it can go till 20.37 % up with median it can go til 1.80 % up and with low it can go till -5.39.

Let’s look at the shareholding pattern total promoter holding is 51.33 % and owned by Government Of India, not a matter of concern, mutual fund holding is 9.95 %, DII is 16.71 % FII 26.94 % and other parties are 4.99 %. continuous increase in noticed in mutual fund holding in last few quarters.

Let me change it to DII holdings and you can see a continuous increase in it FII is almost flat, that means FII has confidence in this stock which shows market has confidence in this stock lets look at the price range for buy and sell.

Power Grid Corporation’s analysis from 3 month Chart

Let me explain in detail after looking 3 months chart as I said in march it went really low till 141 then it recovered well and it again went down as recently 17th June, didn’t recovered much in last 2 months while markets were rising but in last 1 week i.e from 17th June till 23 June it recovered well and became 187 rupees.

You can initiate buy on this stock and between 1-3 months it can go till 210-215. If you are interested for short positions maximum for 1-week short positions between 176 and can go till 181 and your target will be 181 and stop loss will be around 165.

Note this stock analysis of Power Grid Corporation for short & long positions has given 2 options and you will certainly earn some money bullish trend in stock may continue due to good Q4 results.

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