Buy power grid

Hello sir I would like to buy some shares of Power Grid so can you provide me some suitable information about this company’s share.

[Shaleen]

Motilal Oswal is bullish on Power Grid and has recommended buy rating on the stock with a target price of Rs 178 in its research report.

PGCIL reported 3QFY16 revenue of INR53.6b (up 23% YoY), in line with estimate of INR53b.

EBIDTA was marginally higher at INR47.5b v/s estimate of INR46b, up 27% YoY.

Core performance was driven by transmission division EBIT at INR31.4b, up 30% YoY.

Reported PAT was INR16.1b, up 29% YoY and higher than our estimate of INR15b

The deviation was broadly led by higher contribution from telecom, consultancy and transmission divisions (driven by higher capitalization compared with estimate).

They raise their FY16/17 estimates to factor in higher capitalization. We expect PWGR to report PAT of INR61.2b (up 20% YoY) in FY16 and INR72.6b in FY17 (up 19% YoY).

The stock trades at PER of 10x and P/B of 1.5x on FY17E basis. DCF-based TP of INR178/sh. Maintain Buy

Share prices of PGCIL (22/03/2016)

139.30 0.80 (0.58%)

Open Price 138.65

Average Price 139.15

Open Interest 10952000

High Price 139.65

Turnover (Rs in Lakhs) 3595.64

Open Int. Change -308000

Low Price 138.25

No. of Contracts Traded 646

Open Int. Change % -2.74%

Prev. Close 138.50