Event Participants
Executives
4
Vamsi Rama Mohan Burra (Chairman & Managing Director), Satyaprakash Dash (Company Secretary & Compliance Officer), Unidentified functional directors (multiple)
Analysts
7
Apoorva Bahadur (IIFL Capital), Bharani/Mohit Kumar (Avendis Spark), Dhruv (HDFC MF), Ketan Jain (Avendis Spark), Mohit Pandey (Citigroup), Satyadeep Jain (Ambit Capital), Sumit Kishore (Unidentified firm)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Gross Fixed Assets | ₹3.25 lakh crores | Up from ₹2.92 lakh crores; steady expansion of asset base |
| Transmission Lines | 1,86,000 circuit km | 1,635 ckm commissioned in Q1, ~35% of last year's full-year achievement |
| Transformation Capacity | 634,516 MVA | 10,500 MVA added in Q1; 291 substations |
| System Availability | 99.8% | Among the highest in the sector |
| Transmission Charges | ₹10,905 crores | +3% vs ₹10,620 crores in prior quarter; ₹790 crores from new commissioned assets, offset by ₹560 crores regulatory drag (₹330 cr depreciation trajectory + ₹230 cr loss of interim interest) |
| Total Income | ₹11,697 crores | vs ₹11,444 crores prior quarter |
| PAT (Consolidated) | ₹3,598 crores | vs ₹3,631 crores prior quarter (-1%); effective PAT would have been +₹247 crores but for regulatory characteristics |
| Capitalization (Q1) | ₹5,277 crores | 3.13x vs ₹1,683 crores in Q1 last year; ongoing FY27 guidance ₹30,000 crores |
| Capex (Q1) | >10% of FY27 guidance | Against ₹37,000 crore guidance for FY27 |
| EPS | ₹3.87 | Reflecting increased net worth |
| Book Value Per Share | ₹111.85 | Net worth up from ₹96,482 crores to ₹1,40,028 crores |
| Receivable Days | 12 days | Down from 19.41 days; realization 104% at ₹11,404 crores vs billing ₹10,963 crores |
| Equity in TBCB (Operational) | ₹9,965 crores | Up from ₹4,671 crores YoY |
| TBCB Works in Hand | ₹1.46 lakh crores | Part of total works in hand of ₹1.75 lakh crores |
| Consultancy Revenue (Q1) | ₹252 crores | 16 domestic + 3 international orders; footprint in 25 countries |
| Telecom Revenue (Q1) | ₹391 crores | 100% backbone availability; Andaman & Nicobar connectivity; first ILD to Nepal |
Geographic & Segment Commentary
TBCB (Tariff-Based Competitive Bidding): Record success with 6 of 19 projects awarded (including intrastate) through July 2026, securing ~₹2,200 crores in gross annual tariff. Cumulative win rate at 47%. Won India's first synchronous condenser project (Fatehgarh-II, 400kV) — a new asset class. Works in hand at ₹1.46 lakh crore; equity invested in operational TBCB at ₹9,965 crores. Competitive bidding is the primary growth driver, with returns "well calibrated" across the portfolio.
Regulated (RTM/RPM) Assets: Works in hand at ₹25,000 crores. Regulatory regime characteristics created a ₹560 crore revenue drag in Q1 (depreciation trajectory +₹330 crores, loss of interim interest +₹230 crores). Management emphasized this is inherent to the regulatory model — debt unwinds over 12 years — and not a concern. Deemed COD revenue of ~₹300 crores pending regulatory clearance.
Telecom & Consultancy: Telecom revenue ₹391 crores with 100% backbone availability; secured bulk order from NIC/NKN; established first international long-distance connectivity to Nepal via subsidiary PowerTel; Andaman & Nicobar connectivity commissioned. Consultancy revenue ₹252 crores; 25-country footprint; recognizes market potential from digital infrastructure growth.
BESS / New Asset Classes: Filed petitions before CERC (with Northern and Western RPC consent) to develop integrated battery storage under Section 62 of Electricity Act. Working on storage as a new asset class under amended tariff regulations.
Company-Specific & Strategic Commentary
HVDC & Large Pipeline: 21 HVDC projects identified across national pipeline (~14 from 900 GW CEA report, ~6 from Brahmaputra basin). One HVDC project already in bidding; another expected by 2027. Strategic positioning centers on 900+ GW non-fossil capacity by 2035-36 requiring ₹7.9 lakh crore transmission investment, plus ₹6.4 lakh crore for Brahmaputra basin hydro, and 71 GW data center demand.
Order Pipeline & Bidding: Total works in hand ₹1.75 lakh crore (₹1.46 lakh crore TBCB + ₹25,000 crore RTM + ₹4,200 crore other). Bidding pipeline ₹1.19 lakh crore (₹73,875 crore under bidding + ₹45,000 crore to be floated). Major projects: Rajasthan Barner Complex HVDC, Jamkambalia-Jamnagar-Lakadia, ES Nauda, Durgapur, Bikin Rajasthan.
Bulk Procurement Initiative: Migrating from project-specific to bulk procurement to give OEMs visibility; expected to improve equipment pricing and delivery timelines. Government allowed four Chinese companies to participate — management confirmed adherence to GoI guidelines.
Sustainability: 2025 targets achieved including 50% electricity from RE; zero waste to landfill >90%; net water positive >50%; net zero target of 2047 with 20% reduction achieved.
Financing: Signed JBIC green loan agreement of Japanese Yen 80 billion on subsidiary — hedging benefit under GoI announcement.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Capex FY27 | ₹37,000 crores | Q1 execution >10% of guidance; management confident of meeting target |
| Capitalization FY27 | ₹30,000 crores | Q1 achieved ₹5,277 crores; management sees "meaningful upside" with multiple projects on the horizon |
| TBCB Pipeline | ₹1.19 lakh crore under bidding/to be floated | 19 projects awarded in FY27 to date (6 to Power Grid); ₹2,200 crores annual tariff secured |
| Sector Investment | ₹7.9 lakh crore by 2035-36 | CEA estimate for non-fossil capacity additions; will be bid out over next 3-4 years; may increase due to land compensation costs and land rate escalations |
| BESS Implementation | Awaiting CERC order on petitions | Petitions filed; management expects to participate under new regulatory regime |
| TBCB Disclosure | Improved disclosure planned | Management acknowledged analyst need for consolidated TBCB revenue/EBITDA/PAT disclosures; "will examine" |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory Drag on Profitability | ₹560 crore Q1 revenue impact from depreciation trajectory (₹330 cr) and expiry of interim interest differential (₹230 cr). Not profit-neutral as it might appear; certain write-backs not repeated. Management calls it "natural" regulatory characteristic rather than a concern, but analysts noted profitability declined despite large capitalization — including ₹28,000 crore last year. |
| Right-of-Way & Land Compensation Challenges | New circle rates/market rate guidelines adopted by only a few states (Delhi, Haryana, Gujarat). Not factored into ₹7.9 lakh crore pipeline estimates; delays are a key execution risk. Government has revised timelines from 18 to 26-30 months for transmission lines, acknowledging impractical timelines. |
| Execution Timelines | Transmission lines previously took 36-40 months; tightened to 18 months then revised to 26-30 months. Construction, especially TBCB projects, remains dependent on land acquisition, equipment availability, and generator readiness. |
| Regulatory Delay Impact on Earnings Comparability | Interim interest (~230 cr) unavailable as CERC orders get issued — creates YoY earnings drag that is not necessarily visible to investors. |
| Equipment Supply Stress | Earlier pressure easing with capacity ramp-up and bulk procurement; but raw material costs remain a factor in pricing. New Chinese OEM approvals may further ease supply. |
Q&A Highlights
Regulatory Drag on Q1 Profitability
- Question: Quantify the drag from depreciation and regulatory differences this quarter. (Apoorva Bahadur, IIFL Capital)
- Answer: ₹560 crores total — ₹330 crores depreciation trajectory (reduced depreciation → reduced revenue) and ₹230 crores interest differential (between petition filing and CERC order). The diminished interim interest component was ₹230 crores vs ₹257 crores last year; write-back of ₹33 crores in prior year not repeated. As for profitability bridge — effective PAT would have been +₹247 crores but for the regulatory drag. (Unidentified executive)
Sector Investment Pipeline and Timing
- Question: What is the timing for the ₹7.9 lakh crore transmission investment estimate to be bid out? (Bharani, Avendis Spark)
- Answer: Will be spread over the next 3-4 years to have systems available by 2035-36, considering 2-3 year construction periods. Dependent on generation evolution, data centers, green hydrogen/ammonia loads, not just generation. Transmission is not static — it's continuously dynamic. (Vamsi Rama Mohan Burra, CMD)
Land Costs in CEA Estimates
- Question: Are new land rate guidelines incorporated in the ₹7.9 lakh crore estimate? (Bharani, Avendis Spark)
- Answer: Not factored — land compensation under new guidelines is not possible to quantify yet. States are adopting at different paces, and urban vs rural rates differ. The estimate has scope for increase on this front. (Vamsi Rama Mohan Burra, CMD)
Execution Delays & Equipment Supply
- Question: What is the status of execution delays — equipment, land, labor? (Bharani, Avendis Spark)
- Answer: Government has recognized timelines were too tight (18 months was impractical for 765kV D/C lines) — revised to 26-30 months. Land compensation guidelines are settling; states like Gujarat now adopting. Equipment stress is easing with bulk procurement giving OEMs confidence to ramp capacity; prices stabilizing and potentially reducing going forward. Chinese OEM participation (4 approved) will further ease supply. (Unidentified executive; Vamsi Rama Mohan Burra, CMD)
TBCB Equity Return & Disclosures
- Question: What is ROE on operational TBCB and can we get consolidated TBCB financials (revenue, EBITDA, PAT) separately? (Sumit Kishore)
- Answer: Returns are "well calibrated" to ensure investor comfort across the portfolio; each project has different risk profile. Acknowledged the need for TBCB-specific disclosure — "it's an equal concern from my side" — and will examine making better disclosures to help investors evaluate true performance. (Unidentified executive)
HVDC vs BESS Technology
- Question: Will BESS replace HVDC or complement it? And what equipment will Power Grid procure from Chinese OEMs? (Janesh Karia)
- Answer: BESS will not replace HVDC — each has its own utility; planners (CEA) evaluate both including 1200kV HVAC. Power Grid has filed BESS petitions before CERC under Section 62, with RPC clearances from Northern and Western regions. On Chinese equipment: "Power grid continues to be in adherence to the guidelines notified by the Government of India." (Unidentified executive)
TBCB Profitability & Adjusted Profits
- Question: To calculate adjusted Q1 profit — add back ₹230 crores and adjust base for write-backs? (Ketan Jain)
- Answer: Yes — increase current profit by ₹230 crores; reduce base profit by ₹33 crores (provision write-back on a particular company last year). (Unidentified executive)
FY27 Capitalization Guidance Upside
- Question: Is there scope for meaningful upside to ₹30,000 crore capitalisation guidance given strong Q1? (Dhruv, HDFC MF)
- Answer: Yes — Q1 capitalisation of ₹5,277 crores plus additional projects expected to be commissioned. "This number would be that much more steady and improved." (Unidentified executive)
TBCB Accounting & Lease Methodology
- Question: Why is incremental depreciation for TBCB (67% gross block increase) only 27% depreciation increase? (Dhruv, HDFC MF)
- Answer: TBCB projects are now under lease accounting — depreciation is treated as amortization of the lease, so the comparison is not commensurate. PAT impact is identical under either accounting method — lease vs PPE doesn't change profitability. (Unidentified executive)
Key Takeaway
Power Grid reported flat Q1 FY27 consolidated PAT of ₹3,598 crores, constrained by ₹560 crores of regulatory drag (depreciation trajectory plus expiry of interim interest differential) — masking otherwise strong underlying growth where new commissioned assets added ₹790 crores in transmission charges. The company achieved ₹5,277 crores capitalization (3.1x YoY) at 35% of last year's full-year volume, keeping FY27 guidance of ₹30,000 crores capitalization and ₹37,000 crores capex intact. Strategic positioning remains robust with a ₹1.75 lakh crore works-in-hand pipeline, ~47% TBCB win rate including India's first synchronous condenser project, strong execution momentum across HVDC and renewable evacuation corridors, and a nascent BESS entry via CERC petitions. Management is addressing analyst concerns over TBCB disclosure with a commitment to enhanced transparency on consolidated segment profitability. Key watch items include right-of-way/land compensation costs not yet factored into the ₹7.9 lakh crore sector pipeline, potential further adverse regulatory drag from depreciation unwinding on older assets, and the outcome of new equipment supply capacity (including Chinese OEM participation) on pricing. The medium-term growth outlook remains strong as ₹1.19 lakh crore of bidding pipeline converts to awards.