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Buy Power Grid Corporation of India, target Rs 256: Reliance Securities

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Reliance Securities has a buy call on Power Grid Corporation of India with a target price of Rs 256. The current market price of Power Grid Corporation of India is Rs 189.60. Time period given by the brokerage is one year when Power Grid Corporation of India price can reach the defined target.

Outlook Valuation by Reliance Securities:Looking ahead, we expect PGCIL’s earnings to clock 19 per cent CAGR over FY18-20 backed by a healthy order book.

At CMP, the stock trades at 1.6x FY19E 1.4x FY20E P/BV, respectively and 10.2x P/E of FY19E 8.5x P/E of FY20E.

Given higher capitalisation in coming years on the back of huge capex pipeline, steady regulated RoE, we believe that PGCIL’s fundamentals would continue to remain strong.

New project awards and pending CERC 2014-19 transmission tariff norms are the key monitorables in the near-term.

We maintain our BUY recommendation on the stock with an unrevised Target Price of Rs256.




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