Shares of Power Grid Corporation of India Ltd fell on Tuesday, May 20, after the state-run transmission utility reported muted financial performance for the January-March quarter of FY25. The stock dipped 0.6% in early trade, quoting ₹302.15 on the NSE, reacting to a marginal decline in quarterly net profit and a lukewarm rise in revenue. Investor sentiment remained subdued despite a final dividend announcement and strategic exits from joint ventures.
The company posted a slight 0.6% year-on-year drop in standalone net profit to ₹4,143 crore in Q4 FY25, compared to ₹4,166 crore in the same period last fiscal. This decline was primarily attributed to rising expenses that offset the modest gains in operational revenue. Total expenses increased by 6.8% to ₹7,550 crore, outpacing the revenue growth during the quarter.
Highlights:
Q4 FY25 net profit declined 0.6% YoY to ₹4,143 crore.
Shares dropped 0.6% to ₹302.15 on NSE.
Total quarterly expenses rose 6.8% to ₹7,550 crore.
Modest Revenue Growth Amid Rising Cost Pressures
Power Grid’s operating revenue for the March quarter rose by 2.5% year-on-year to ₹12,275 crore, up from ₹11,978 crore in Q4 FY24. While the company managed to sustain top-line growth, the rise was modest and did not translate into a proportional increase in bottom-line performance due to elevated cost pressures.
Higher maintenance, administrative, and operational expenses contributed to the narrowing profit margins during the quarter. Despite the stable revenue stream from regulated transmission charges, the company’s profitability was constrained by increased outgoes, especially as newer projects begin to scale and demand higher maintenance expenditures.
Highlights:
Operating revenue grew 2.5% YoY to ₹12,275 crore.
Cost pressures affected profit margins despite stable income streams.
Margin squeeze linked to increased operational expenditure.
Final Dividend of ₹1.25 Per Share Recommended for FY25
The board of Power Grid Corporation declared a final dividend of ₹1.25 per equity share for FY25. The dividend will be paid within 30 days of its declaration at the upcoming Annual General Meeting (AGM), subject to shareholder approval. This comes in addition to interim dividends distributed earlier in the fiscal year and signals the company’s ongoing commitment to delivering returns to shareholders.
Dividend payouts by government-backed firms such as Power Grid are closely watched by income-focused investors and play a role in supporting stock valuations, especially in periods of slow earnings growth.
Highlights:
Final dividend of ₹1.25 per share recommended for FY25.
Dividend to be disbursed within 30 days post-AGM.
Reinforces focus on shareholder returns despite flat earnings.
Strategic Exit from Torrent and Sikkim Joint Ventures Announced
Alongside its quarterly earnings, Power Grid also announced its complete exit from two joint ventures: Torrent Power Grid Ltd and Sikkim Power Transmission Ltd. These exits mark a strategic streamlining of the company’s investment portfolio, aimed at sharpening operational focus and reducing exposure to non-core assets.
Torrent Power Grid was a joint venture with Torrent Power, while Sikkim Power Transmission Ltd was a partnership with Sikkim Urja. The company has not disclosed the financial details of these transactions but indicated that the exits align with its evolving business priorities and capital allocation framework.
Highlights:
Exit from Torrent Power Grid Ltd and Sikkim Power Transmission Ltd.
Strategic divestment to streamline focus on core operations.
Reflects dynamic capital allocation and risk reduction strategy.
Morgan Stanley Maintains ‘Equal-Weight’ Rating with ₹295 Target
Global brokerage Morgan Stanley retained its ‘equal-weight’ rating on Power Grid shares, with a target price of ₹295 per share, implying a minor downside of around 3% from current levels. The brokerage noted that the Q4 performance was largely in line with its expectations, citing higher other income as a contributor to the bottom line.
Morgan Stanley added that it would monitor the company’s updates on recently commissioned projects and the progress of new wins under India’s tariff-based competitive bidding (TBCB) framework. These factors are likely to determine the trajectory of future earnings and investor sentiment.
Highlights:
Morgan Stanley keeps ‘equal-weight’ rating with ₹295 target.
Q4 performance deemed in-line, aided by higher other income.
Focus remains on new project updates and TBCB wins.
Underperformance Versus Broader Market Raises Investor Concerns
Power Grid’s stock has underperformed the broader Indian equity markets over the past year, shedding approximately 6.6% even as the benchmark Nifty 50 index gained around 10.7% during the same period. The lackluster stock movement has sparked investor concerns about the company’s growth visibility amid regulatory and execution challenges.
While the company remains a critical player in India’s power transmission landscape, its growth prospects hinge on timely execution of pipeline projects and policy tailwinds for transmission infrastructure investments. The underperformance also reflects market caution around capital-intensive government-run utilities in a volatile interest rate environment.
Highlights:
Power Grid shares fell 6.6% over the past year.
Underperformed Nifty 50, which gained 10.7% during the same period.
Investor focus on execution risk and regulatory clarity.
