Shares of Energy Grid ended up 0.3% at ₹209.20 on Friday.
“Contemplating its defensive traits led by an assured returns based mostly regulated enterprise mannequin and our cautious view on macro volatility, we consider this sharp underperformance is unwarranted,” stated Financial institution of America Securities.
Valuation at 1.7 instances on two-year ahead ebook worth aren’t overly costly after about 15% correction from the highest, the brokerage stated. Financial institution of America Securities stated transmission capex in India has peaked which might lead to diminishing earnings progress for Energy Grid. Nonetheless, the dividend payout is growing and there may be earnings visibility from six initiatives of ₹6,700 crore commissioned in FY22. The brokerage famous that there’s an underneath building pipeline of one other 12 initiatives value ₹14,800 crore.
“We nonetheless discover PGCIL enticing within the present surroundings, notably contemplating its excessive return on fairness of round 15%, and enticing dividend yields of 6-7%, backed by robust visibility from asset monetisation pipeline,” stated Financial institution of America Securities.
The brokerage sees continuation of wholesome payouts and enticing dividend yields of 6-7% within the FY23 and FY30 interval.
