POWER GRID CORPORATION OF INDIA fair value — is it overvalued?
The fair value of POWER GRID CORPORATION OF INDIA (POWERGRID), built from its filed accounts — ten years of results, the method that fits this business, and what today's price already assumes.
The market expects much less from POWER GRID CORPORATION OF INDIA than it has delivered before.
At today’s share price, buyers are assuming POWER GRID CORPORATION OF INDIA earns about 14.5% a year on the money invested in it, from here on. Over the last ten years it actually earned about 18.2% a year. That is a big step down from its own record. Either the market can see a problem that the published accounts do not show yet, or it is expecting a slowdown that has not happened.
What the market is assuming
Worked backwards from today's share price: the return on equity today’s price implies for POWER GRID CORPORATION OF INDIA, against what the model assumes.
How to read this. The number on the left is the return on equity today’s share price quietly takes for granted. The number on the right is what the model actually assumes. When the two are far apart, that gap is the bet you would be taking.
Ten years, in charts
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
The numbers behind them
Revenue and net profit as filed, in ₹ crore.
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2018 | 29,941 | 8,198 | 27.4% |
| FY2019 | 35,059 | 10,034 | 28.6% |
| FY2020 | 37,744 | 11,059 | 29.3% |
| FY2021 | 39,640 | 12,036 | 30.4% |
| FY2022 | 41,616 | 16,824 | 40.4% |
| FY2023 | 45,581 | 15,417 | 33.8% |
| FY2024 | 45,843 | 15,573 | 34.0% |
| FY2025 | 45,792 | 15,521 | 33.9% |
| FY2026 | 46,733 | 15,928 | 34.1% |
How this company gets valued — and why
A rate-regulated utility earns an allowed return on a regulated asset base, so capex builds the earning base rather than draining owner cash. A cash-flow model charges that capex and credits none of the regulated earnings it buys, so this is valued on excess return over its book.
Excess return — the correct lens for a regulated utilityUnderstand this method
- ROCE and ROE Explained: The Two Ratios That Reveal Quality
- WACC and the Discount Rate, Explained Simply
- How to Read Debt: Is This Company Financially Safe?
- How every one of our energy & utilities stocks is valued
The complete valuation
Unlock the complete valuation report
- ✓Fair value per share — with the full working behind it
- ✓Bull, base and bear cases — and what moves between them
- ✓Every assumption — growth, margins, cost of capital, with sources
- ✓Peer comparison — how rivals are priced on the same measures
- ✓Downloadable PDF report — the full write-up, yours to keep
Compare with peers
The same valuation, run side by side.
POWER GRID CORPORATION OF INDIA vs NTPCTransmission against generation, on the same regulated return.→POWER GRID CORPORATION OF INDIA vs Coal IndiaBoth state-owned links in the same power chain.→POWER GRID CORPORATION OF INDIA vs ONGCTwo state-controlled energy giants on regulated economics.→Frequently asked
Is POWER GRID CORPORATION OF INDIA overvalued?
At ₹263 the market is pricing in roughly 14.5% sustained ROE, against the ~18.2% its own record supports. That is less than it has delivered — on these numbers the market is asking the business for less than its own record, which usually means it doubts the record repeats.
What is the intrinsic value of POWER GRID CORPORATION OF INDIA?
It is computed from the filed financial statements using the method that fits this business (excess return), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
Is POWER GRID CORPORATION OF INDIA a good long-term investment?
Revenue went from ₹0.30 lakh crore to ₹0.47 lakh crore over the period shown, while return on equity moved from 19.5% to 18.2%. Growing scale on a rising return is a very different proposition from growing scale on a falling one.
How much debt does POWER GRID CORPORATION OF INDIA carry?
Debt to equity stands at 1.33, down from 1.50 at the start of the period — the balance sheet is a core input to the cost of capital used here.
How does FairStocks calculate fair value?
From published financial statements. The method is chosen to fit the business — a bank on excess return, a regulated utility on its rate base, a conglomerate by its parts — and every assumption is shown with its source. When the numbers do not support an estimate, no estimate is published. This is an educational research tool: it reports what the model computed and does not recommend buying or selling anything.
What assumptions are used to value POWER GRID CORPORATION OF INDIA?
A cost of capital of 10.62%, growth drawn from the company's own record rather than from guidance, and the valuation method that fits the business. All of them are listed in the report, with how much each one moves the answer.