Power Grid Q2 net profit inches up 9% but shares extend losses

Power Grid Corp of India Ltd (PGCIL) reported a 9.12% increase in its consolidated net profit for the second quarter ended September 30, helped by a rise in revenue and a drop in finance costs.

The government-owned power transmission behemoth said consolidated net profit rose to Rs 3,376.38 crore for the July-September period from Rs 3,094 crore a year earlier.

Consolidated net sales went up 7.74% to Rs 10,266.98 crore over the same period last year. 

The company reported a consolidated profit before tax of Rs 3,968.3 crore, a rise of 2% over the previous year’s second quarter numbers. Tax expenses fell to Rs 592 crore from Rs 795 crore, giving an extra lift to the bottom line.

PGCIL’s total expenses climbed to Rs 6,235 crore from Rs 5,986 crore, but finance costs fell to Rs 1,884.5 crore from Rs 2,003 crore a year earlier.

PGCIL is a maharatna company owned 51.34% by the central government, and is the biggest electric power transmission company in the country. The company reported a 5.5% rise in revenue from the transmission segment in the second quarter to Rs 10,054.26 crore. 

Shares of the company, which is part of the 30-stock BSE Sensex index, slipped 1.13% to end at Rs 184.50 apiece on the BSE. The shares are now down 12% since touching a one-year high on October 18.

Power Grid Q2: Other highlights

1) The capex for the second quarter was Rs 1,939 crore.

2) PGCIL capitalized assets worth Rs 7,633 crore in Q2. Its gross fixed assets stood at Rs 2,54,997 crore.

3) PGCIL added transmission lines of 2,100 ckm in length and 14,000 MVA in transmission capacity.

4) Its total transmission assets at the end of September were at 1,70,724 ckm.

5) The consultancy segment, although small, saw its revenue rise 75.12% on a year-on-year basis.

6) EBITDA stands at Rs 9,358.30 crore in Q2, up 7.04% from Rs 8,742.73 crore a year earlier.

Power Grid management commentary

The state-run company is an essential service provider, and so wasn’t impacted by the lockdowns imposed last year and this year to control the Covid-19 pandemic.

It said that it considered various internal and external information available to assess the impact of the pandemic on its financial results for the quarter and half year ended September 30 and concluded that there had been no material impact on its operations or profitability.

PGCIL also said that during the quarter it enhanced its inter-regional power transfer capacity by 5,700 MW with the commissioning of the Vindhyachal-Varanasi line and the Raigarh-Pugalur link.

With this enhancement, the inter-regional capacity of the national grid is now at 1,10,750 MW, it added.