Rating is upgraded for power grid

Following the approval by Power Grid Corporation’s board for a ₹656-crore investment in electricity transmission projects in India, the company’s stock witnessed a surge on February 20. Bernstein, a financial research firm, initiated coverage on the stock with an ‘outperform’ rating and set a target price of ₹315.
Bernstein anticipates a significant increase in the company’s capital expenditure (capex) over the next couple of years, estimating it to rise by 30 percent. The firm highlighted interstate transmissions, batteries, and smart meters as emerging growth areas for the state-owned utility major.
Moreover, Bernstein emphasized Power Grid’s access to stable cash flows from existing assets and its advantageous position with a low cost of debt. The brokerage also noted that regulatory support provides a favorable outlook for the company’s future prospects.