Result Update Rating matrix Rating Buy Target 173 Target Period 12 months Potential Upside 21% January 29, 216 Power Grid Corporation (POWGRI) 132 Robust numbers on highest ever capitalisation What s Changed? Target Unchanged EPS FY16E Changed from 12.2 to 12.6 EPS FY17E Changed from 14.4 to 15. Rating Unchanged Quarterly Performance Q3FY16 Q3FY15 YoY (%) Q2FY16 QoQ (%) Revenue 5,46.6 4,353.6 24.2 4,918. 9.9 EBITDA 4,893.9 3,872.6 26.4 4,427.5 1.5 EBITDA (%) 9.5 89. 157 bps 9. 49 bps Adj. PAT 1,613.1 1,228.9 31.3 1,448. 11.4 Key Financials Crore FY15 FY16E FY17E FY18E Net Sales 17,16 2,928 26,129 29,781 EBITDA 14,728 18,262 23,151 26,435 Net Profit 4,979 6,61 7,824 9,121 EPS ( ) 9.5 12.6 15. 17.4 Valuation summary FY15 FY16E FY17E FY18E P/E 15. 11.3 9.6 8.2 Target P/E 18.2 13.7 11.6 9.9 EV / EBITDA 11.5 1.4 9.1 8.4 P/BV 2. 1.7 1.5 1.3 RoNW (%) 13.1 15.3 15.8 16.1 RoCE (%) 7.8 7.9 8.7 8.9 Stock data Particular Amount Market Capitalization ( Crore) 74,759. Total Debt (FY15) ( Crore) 9,575.8 Cash and Investments (FY15) ( Crore) 2,248. EV ( Crore) 163,86.8 52 week H/L ( ) 159 / 121 Equity capital ( Crore) 5,231.6 Face value 1 Price performance (%) 1M 3M 6M 12M Powergrid (1.4) 3.6 (1.5) (7.6) NTPC 3.1 8.3 6.9.1 NHPC (.3) 1.8 7. 1.8 Research Analyst Chirag Shah shah.chirag@icicisecurities.com Anuj Upadhyay anuj.upadhyay@icicisecurities.com In Q3FY16, revenues increased 24.2% YoY to 5,47 crore (above I- direct estimate of 5,233.6 crore) driven by 23.%, 12.% and 113.7% YoY growth across transmission, consultancy and telecom, respectively Asset capitalisation totalled ~ 17,27 crore while capital expenditure was ~ 5,368 crore. Capitalisation during 9MFY16 totalled 26,82 crore surpassing our annual target of 26,6 crore Margins improved 157 bps YoY to 9.5% primarily led by margin improvement across transmission and telecom sectors. Other income, however, declined 25.8% YoY due to deployment of surplus cash towards new projects As per the management, the deferred tax has become a pass through to customers as per the new 214-19 CERC tariff guideline. Accordingly, effective tax rate came in at 2% in Q3FY16 PAT increased 31.3% YoY to 1,613 crore, above our estimate of 1,433.8 crore for the quarter We expect the capitalisation-capex ratio to surpass 1x in FY16E. The commissioning of phase-ii Biswanath Chariyali Agra HVDC project and Champa-Kurukshetra HVDC Pole-I will happen by Q1FY17 Monopoly situation of company unchallengeable Power Grid Corporation (PGCIL) is the only listed player in the regulated transmission business in India with 5% share in the segment. PGCIL s transmission infrastructure comprises 127,539 ckm of lines, 25 substations and 248,164 MVA of transformer capacity. The company s transmission line length, substation numbers and transformer capacity have grown at a CAGR of 8.8%, 9.2% and 25.6%, respectively, over FY11-15. Further, the interregional transfer capacity has grown from 5,5 MW in 21-2 to 38,15 MW in March 215. It operates on a regulatory business model with fixed RoE (15.5% + incentives) while its tariff is based on CERC regulation. PGCIL has been consistently operating at availability (PAF) of ~1%. Strong base business, enhanced capex plan to drive future growth The company has planned a capex of 1.1 lakh crore over the Twelfth Plan, which is 1% higher than its Eleventh Plan capex of 55, crore. PGCIL earns 15.5% RoE on its capitalised asset and is largely a beneficiary of increased capitalisation. It has added 68,664 crore of assets over FY12-15. In FY15, the company had incurred 22,46 crore capex and capitalised assets worth 21,76 crore (up 37.% YoY). The management expects to increase the capitalisation-capex ratio to above 1.x for FY16E and FY17E. It has already capitalised 26,82 crore of asset and expects to capitalise ~ 28, crore-3, crore of assets in FY16E, followed by 28, crore in FY17E. Given the strong capitalisation trend over FY12-15, we believe PGCIL will be able to deliver revenue CAGR of 19.3% over FY14-17E. Upgrade earnings on strong capitalisation; maintain BUY We believe PGCIL commands the best growth profile (earnings CAGR of ~22.4% over FY15-18E) coupled with relatively less risky business model in the domestic utility universe. The company s capitalisation-capex ratio is expected to increase to ~1.4x in FY16E and FY17E, which reduces the risk of equity dilution in the near future. We have revised our revenue and earning estimates upward for FY16E and FY17E, respectively, to factor in higher capitalisation over the period to 29,162 crore and 27,37 crore respectively. We now roll over our valuation on FY18E as we continue to maintain our target price of 173 by assigning a targeted P/BV multiple of 1.6x. We maintain our BUY recommendation of Power Grid. ICICI Securities Ltd Retail Equity Research
Variance analysis Q3FY16 Q2FY15E Q3FY15 YoY (%) Q2FY16 QoQ (%) Comments Total sales 5,46.6 5,233.6 4,353.6 24.2 4,918. 9.9 Sales growth was driven by increased income across transmission business led by increased capitalisation over the years Other operating Income...... Total Income 5,46.6 5,233.6 4,353.6 24.2 4,918. 9.9 Personnel cost 244.9 282.6 253.8 (3.5) 238.9 2.5 General & Admin exp 365.1 392.5 33.2 1.6 361.1 1.1 Non-recurring exp Total expenses 61. 675.1 584. 4.5 6. EBITDA 4,893.9 4,693.5 3,872.6 26.4 4,427.5 1.5 EBITDA growth was fuelled by strong topline growth and an improved operating performance during the quarter EBITDA Margin (%) 9.5 89.7 89. 156.5 9. 49.1 Accordingly, margins improved 156.5 bps YoY, which was aided by better margins across all transmission and telecom and business Depreciation 1,58.5 1,622.4 1,3.7 21.5 1,448.1 9.1 Rise in depreciation reflects incremental YoY capacity Interest 1,287.5 1,256.1 1,24.7 25.7 1,149. 12.1 Incremental capacity leads to higher interest cost YoY Other Income 98.3 135. 132.5 (25.8) 18.9 (9.8) Fall in other income was primarily due to lower interest income as surplus cash was deployed towards execution of new projects PBT 2,25.9 1,815. 1,547.3 3.9 1,83.4 1.7 Extraordinary Income...... Extraordinary expense Total Tax 412.7 381.1 318.3 29.7 382.3 7.9 Adjusted PAT 1,613.1 1,433.8 1,228.9 31.3 1,448. 11.4 Consequently, PAT increased 31.3% YoY, which was above our estimate Key Metrics Transmission 5,142.8 5,61.6 4,181.7 23. 4,78.3 9.2 Growth in transmisison income reflects increased capitalisation of assets of 21,76 crore in FY15 (up 37% YoY) and 26,87 crore in 9MFY16 (up 59.8% YoY) Consultancy 114.1 87. 11.9 12. 99.4 14.9 Telecom 149.7 85. 7.1 113.7 11.4 35.6 Change in estimates FY16E FY17E Introducing ( Crore) Old New % Change Old New % Change FY18E Comments Revenue 2,381.8 2,927.9 2.7 25,456.2 26,129. 2.6 29,78.5 Estimates revised marginally to factor in increased capitalisation going ahead EBITDA 17,716.2 18,262.3 3.1 22,478.5 23,151.3 3. 26,435.2 EBITDA Margin (%) 86.9 87.3 34 bps 88.3 88.6 3 bps 88.8 PAT 6,378.2 6,61.2 3.5 7,541.1 7,824.1 3.8 9,12.6 EPS ( ) 12.19 12.62 3.5 14.41 14.96 3.8 17.43 Assumptions Current Earlier Introducing FComments Crore FY14 FY15 FY16E FY17E FY16E FY17E FY18E Capex 22,324 22,46 25, 23,875 22,5 22,738 The company's capitalisation/capex ratio is likely to remain above 1.2x over FY16E 2,48 and FY17E Capitalisation 15,94 21,764 29,162 27,37 26,662 25,9 We have revised our estimates upward to factor in highest ever capitalisation of 23,21 17,27 crore in Q3FY16 ICICI Securities Ltd Retail Equity Research Page 2
Exhibit 1: Trend in capex and capitalisation 35 3 25 ( crore) 2 15 15 1 8 3734 361 5 125 714 Company Analysis Higher capex, capitalisation to drive future earning PGCIL is engaged in bulk power transmission including planning, coordination, supervision and control over inter-state transmission system and operation of national power grids. The company owns and operates about 127,539 ckm of transmission lines, 25 sub-stations and 248,164 MVA MVA of transformer capacity all of which have grown at a CAGR of 8.3%, 8.3% and 15.4%, respectively, in FY3-15. Also, interregional transfer capacity has grown from 5,5 MW in FY2 to 38,15 MW in FY15. PGCIL has consistently maintained its line availability of over 99%. The company incurred a capex of 55, crore in the Eleventh Five Year Plan and enhanced the target to 1.1 lakh crore for the Twelfth Five Year Plan. Of this, PGCIL has incurred capex of 64,821 crore and capitalised assets worth 54,881 crore till FY15. Revenue and PAT have grown at a CAGR of 2% each over FY9-15. Accordingly, we believe revenue and PAT will grow at a CAGR of 2.3% and 22.4%, respectively, over FY15-18E. 17814 1345 237 17213 22324 2246 21764 1594 25 29162 23875 2737 248 2321 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16E FY17E FY18E Capex Capitalisation Exhibit 2: Revenue and PAT trend With the capitalisation-capex ratio almost reaching 1.x in FY15, we believe FY16E and FY17E would see a higher capitalisation ratio of ~1.4x. The company has already executed a big ticket project of Biswanath Chariyali- Agra HVDC line (~ 75 crore) and another Champa-Kurukshetra HVDC Pole-I (~ 5 crore) is likely to be commissioned by FY17E. Factoring in the same, we now the capitalisation at 29,162 crore (vs. 26,6 crore earlier) and 27,37 crore (vs. 25,9 crore earlier) in FY16E and FY17E, respectively. Accordingly, regulated assets are expected to grow at a CAGR of 22.3% in FY15-17E to 5,737 crore. Exhibit 3: Regulated asset trend ( crore) 315 27 225 18 135 9 45 26129 2928 1716 15153 12758 135 661 7824 4235 4497 4979 3255 29781 912 FY12 FY13 FY14 FY15 FY16E FY17E FY18E Revenue PAT ( crore) 7 6 5 4 3 2 1 577 5737 42626 33878 27349 22577 17414 FY12 FY13 FY14 FY15 FY16E FY17E FY18E Source: Company, ICICIdirect.com, Research Source: Company, ICICIdirect.com, Research ICICI Securities Ltd Retail Equity Research Page 3
Exhibit 4: Quarterly trend in capitalisation 2 18 16 14 12 1 8 6 4 2 1727 7815 7842 7193 6352 4878 41 27 2558 295 3557 473 499 4547 553 345 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 ( crore) Exhibit 5: Quarterly revenue trend 6 5 4 3634 414 3799 4184 475 439 4486 491 4788 527 555 3 2 1 Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 ( crore) Q4FY15 Q1FY16 Q2FY16 Q3FY16 Exhibit 6: Segmental revenue break-up 16. 14. (%) 12. 1. 98. 96. 94. 92. 9. 88. 3.6 2. 95.1 2.7 2.2 92.4 5.3 4. 2.3 1.8 94.2 92.8 4.3 2.9 96.7 1.5 1.5 1.7 2.1 96.4 96.1 2.3 1.6 94.1 3.3 1.9 2. 2.6 1.9 2.2 96.2 95.7 95.1 86. Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Transmission Telecom Consultancy ICICI Securities Ltd Retail Equity Research Page 4
Strong capitalisation over FY13-16 to drive future earning PGCIL has incurred 22,46 crore capex in FY15 and capitalised assets worth 21,764 crore, in line with our estimate for the year. The management has guided for commissioning of a few big ticket key projects during FY16 of which it has already commissioned Biswanath Chariyali Agra line (~ 8, crore project). The company has till date capitalised assets worth 26,81 crore in 9MFY16. Furthermore, other big projects like Champa-Kurukshetra Pole-I line, Sholapur - Pune line, etc, are likely to add another ~ 8, crore to its capitalised assets in FY17E. Overall, the company plans to commission 23 transmission lines in FY16E of which 1 are yet to be completed. Furthermore, with highest ever capitalisation of 17,27 crore in Q3FY17, we have revised our capitalisation target for FY16E and FY17E to 29,162 crore and 27,37 crore, respectively, compared to our earlier estimate of 26,6 crore and 25,9 crore, respectively. Accordingly, we have revised our revenue estimates upward by 2.1% and 2.4% for FY16E and FY17E respectively, while earning estimates have been upgraded by 3.5% and 3.8% respectively for the same period. Accordingly, we believe that PGCIL will deliver revenue and PAT CAGR of 2.3% and 22.4%, respectively for FY15-FY18E. Also, the recent 5,321 crore fresh equity fund raised by the company has relaxed its 73:27 debt/equity to 72:28, which, we believe, is sufficient to meet its equity requirement for FY16E. While the dilution would marginally impact RoE in the medium term, the same is expected to grow in FY16E- 18E, factoring in the increased earnings from higher regulatory assets. Exhibit 7: Expected RoE and D/E trend, going ahead (%) 18 16 14 12 1 (x) 8 6 4 2 13.1 13.1 2.5 2.3 15.3 15.8 16.1 2.7 2.8 2.7 FY14 FY15 FY16E FY17E FY18E 3. 2.5 2. 1.5 1..5. RoE D/E ICICI Securities Ltd Retail Equity Research Page 5
Outlook and valuation We believe PGCIL has the best growth profile (earnings CAGR of 22.4% in FY15-18E) coupled with a relatively less risky business model in the domestic utility universe. Furthermore, increased capitalisation in FY13-15 would lead to increased RoE in FY18 to 16.1%. The company s capitalisation-capex ratio is expected to increase to ~1.4x in FY16E and FY17E. Also, with higher rate of capitalisation, the capex is expected to reduce the risk of further equity dilution in the company. We have revised our revenue and earning estimates upward for FY16E and FY17E, respectively, to factor in higher capitalisation over the period to 29,162 crore and 27,37 crore, respectively. We now roll over our valuation on FY18E as we continue to maintain our target price of 173 by assigning a targeted P/BV multiple of 1.6x. We maintain our BUY recommendation on Power Grid. ICICI Securities Ltd Retail Equity Research Page 6
Company snapshot 18 Target Price 173 16 14 12 1 8 6 4 Apr-1 Jul-1 Oct-1 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Source: Bloomberg, Company, ICICIdirect.com Research Key events Date Event Aug-1 Mulls foray into telecom-tower business, to unlock the value of its tower assets Feb-1 GoI divests its ~17% stake in the company by launching an FPO, which got oversubscribed. The issue went for a fresh issue of 42.8 crore shares and equal number of government share dilution. The price was fixed at 9/share and ~ 3787 crore was raised by the GoI Mar-11 Capitalisation during FY11 reached 7313 crore as the company inched towards the last year of the Eleventh Five Year Plan Jan-12 Management guides capital expenditure of 1 lakh crore for Twelfth Five Year Plan; 82% higher than Eleventh Plan capex target of 55 crore Mar-12 Annual capitalisation reaches 14,1 crore as the company ended Twelfth Plan with a total capitalisation of 34715 crore and a capex of 53288 crore Mar-13 Achieves its highest ever annual capitalisation of 17,213 crore. Also surpasses 1,, ckt transmission line capacity, substation capacity of 164,763 MVAs and inter-regional capacity of 29,75 MW Aug-13 Management revises its Twelfth Five Year Plan capex by 1% to 1,1, crore to take up the new business opportunity Dec-13 Launches second FPO, which got subscribed 6.74 times. The issue comprised 13% fresh equity, which fetched the company 5,4 crore and ~ 1,6 crore was raised by the GoI at the finalised price of 9/share. GoI now holds 57.9% in the company Dec-13 CERC proposes stringent 214-19 draft tariff, which proposes higher availability criteria for incentives that would impact earnings by 2-3% Feb-14 CERC issues a final tariff order for 214-19, in line with the draft proposal Dec-15 Reports highest ever asset capaitalisation of 17,27 crore for the quarter after the commissioning of of Biswanath Chariyali-Agra HVDC line in October 215 Top 1 Shareholders Shareholding Pattern Rank Name Latest Filing Date % O/S Position (m)n Change (m) (in %) Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 1 Government of India 3-Sep-15.58 3,28.8. Promoter 57.9 57.9 57.9 57.9 57.9 2 Capital Research Global Investors 3-Sep-15.8 434. -31.2 FII 27.41 27.58 27.55 26.49 26.8 3 Capital World Investors 31-Dec-15.6 296.7-33.2 DII 7.53 7.74 7.94 8.25 8.65 4 Life Insurance Corporation of India 3-Sep-15.3 142.4. Others 7.16 6.78 6.61 7.36 7.37 5 ICICI Prudential Asset Management Co. Ltd. 3-Nov-15.3 141.5 2.3 6 Comgest S.A. 3-Jun-15.2 126.7 -.4 7 ICICI Prudential Life Insurance Company Ltd. 3-Sep-15.2 83.1 6.4 8 T. Rowe Price International (UK) Ltd. 31-Dec-15.1 69.1. 9 HDFC Asset Management Co., Ltd. 3-Nov-15.1 43.5 5.3 1 FIL Investment Management (Hong Kong) Limited 31-Dec-15.1 36. -.8 Source: Reuters, ICICIdirect.com Research Recent Activity Investor name Investor name Investor name Value Shares Investor name Value Shares Vontobel Asset Management, Inc. 26.124745 11.77554 Capital World Investors -7.68542-33.1514 ICICI Prudential Life Insurance Company Ltd. 12.857791 6.363983 Capital Research Global Investors -63.2341-31.19353 HDFC Asset Management Co., Ltd. 1.856663 5.3846 Mellon Capital Management Corporation -19.54225-9.672465 Fidelity Management & Research Company 5.865399 2.863781 Templeton Investment Counsel, L.L.C. -13.25-5.94434 ICICI Prudential Asset Management Co. Ltd. 4.82127 2.344671 DSP BlackRock Investment Managers Pvt. Ltd. -8.533235-4.28 ICICI Securities Ltd Retail Equity Research Page 7
Financial summary Profit and loss statement Crore (Year-end March) FY15 FY16E FY17E FY18E Total operating Income 17,16 2,928 26,129 29,781 Growth (%) 13 22 25 14 Employee Expenses 1,24 1,19 1,6 1,123 Other expenses 1,355 1,647 1,918 2,222 Total Operating Expenditure 2,379 2,666 2,978 3,345 EBITDA 14,728 18,262 23,151 26,435 Growth (%) 14 24 27 14 Depreciation 5,85 6,125 7,244 8,25 Interest 3,979 4,292 6,462 7,182 Other Income 674 45 335 352 PBT 6,337 8,251 9,78 11,4 Others 47 Total Tax 1,31 1,65 1,956 2,28 PAT 4,979 6,61 7,824 9,121 Growth (%) 11 33 19 17 EPS ( ) 9.5 12.6 15. 17.4 Cash flow statement Crore (Year-end March) FY15P FY16E FY17E FY18E Profit Before Tax 6,289 8,251 9,78 11,4 Add: Depreciation 5,85 6,125 7,244 8,25 (Inc)/dec in Current Assets (6,328) (493) (3,445) (2,621) Inc/(dec) in CL and Provisions 5,353 1,933 (979) Others 3,62 3,136 5,93 5,586 CF from operating activities 13,462 18,952 18,673 21,591 (Inc)/dec in Investments (29,26) (33,962) (33,37) (22,21) (Inc)/dec in Fixed Assets 2,34 32 3 29 Others 1 2 3 4 CF from investing activities (26919) (33928) (333) (22177) Issue/(Buy back) of Equity Inc/(dec) in loan funds 15,75 22,54 21,454 13,39 Dividend paid & dividend tax (1,358) (1,543) (1,543) (1,852) Inc/(dec) in Sec. premium 1 2 3 4 Others (3,979) (4,292) (6,462) (7,182) CF from financing activities 9739 16221 13452 4279 Net Cash flow (3,721) 1,242 (885) 3,685 Opening Cash 4,418 697 1,939 1,54 Closing Cash 697 1939 154 4739 Balance sheet Crore (Year-end March) FY15P FY16E FY17E FY18E Liabilities Equity Capital 5,232 5,232 5,232 5,232 Reserve and Surplus 32,849 37,97 44,187 51,456 Total Shareholders funds 38,81 43,138 49,419 56,687 Total Debt 94,566 116,62 138,74 151,383 AAD 4,517 4,517 4,517 4,517 Minority Interest / Others 3,78 3,78 3,78 3,78 Total Liabilities 14944 16856 195791 216368 Assets Gross Block 118,764 147,926 174,963 198,173 Less: Acc Depreciation 28,158 34,283 41,527 49,732 Net Block 9,66 113,643 133,436 148,44 Capital WIP 56,199 6,999 66,999 65,999 Total Fixed Assets 146,86 174,643 2,435 214,44 Investments 1,149 1,117 1,87 1,58 Inventory 85 1,12 1,156 1,312 Debtors 1,782 1,884 2,9 2,382 Loans and Advances 1,264 1,464 13,64 14,89 Other Current Assets 1,959 1,988 2,482 2,829 Cash 697 1,939 1,54 4,739 Total Current Assets 15,552 17,287 19,847 26,153 Current liabilities 18,498 2,5 19,824 18,617 Other Liabilities 4,65 4,941 5,754 6,666 Total Current Liabilities 22,563 24,991 25,578 25,283 Net Current Assets (7,11) (7,74) (5,731) 87 Others Assets Application of Funds 14944 16856 195791 216368 Key ratios (Year-end March) FY15P FY16E FY17E FY18E Per share data ( ) EPS 9.5 12.6 15. 17.4 Cash EPS 19.2 24.3 28.8 33.1 BV 72.8 82.5 94.5 18.4 DPS 2.2 2.5 2.5 3. Cash Per Share 1.3 3.7 2. 9.1 Operating Ratios (%) EBITDA Margin 86.1 87.3 88.6 88.8 PBT / Total Operating income 37. 39.4 37.4 38.3 PAT Margin 29.1 31.5 29.9 3.6 Debtor days 38. 32.9 29.2 29.2 Return Ratios (%) RoE 13.1 15.3 15.8 16.1 RoCE 7.8 7.9 8.7 8.9 RoIC 7.8 7.9 8.7 9.1 Valuation Ratios (x) P/E 15. 11.3 9.6 8.2 EV / EBITDA 11.5 1.4 9.1 8.4 EV / Net Sales 9.9 9.1 8.1 7.4 Market Cap / Sales 4.4 3.6 2.9 2.5 Price to Book Value 2. 1.7 1.5 1.3 Solvency Ratios Debt/EBITDA 6.4 6.4 6. 5.7 Debt / Equity 2.5 2.7 2.8 2.7 Current Ratio.7.7.8 1. Quick Ratio..1..2. ICICI Securities Ltd Retail Equity Research Page 8
ICICIdirect.com coverage universe (Utilities) Sector / Company CMP Target Rating M Cap EPS ( ) P/E (x) EV/EBITDA (x) RoCE (%) RoE (%) ( ) TP( ) Rating ( Cr) FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E NHPC (NHPC) 21 22 Buy 22,916 1.9 2. 2.3 11. 1.3 9.1 8.4 8.2 7. 7.7 7.8 8.8 7.6 7.7 8.2 Power Grid (POWGRI) 143 173 Buy 74,812 9.5 12.2 14.4 15. 11.7 9.9 11.3 1.4 9.2 7.8 7.8 8.6 13.1 14.9 15.4 PTC India (POWTRA) 64 71 Hold 1,88 6.9 6.4 6.8 9.3 9.9 9.3 5.7 5.9 5.4 12.7 1.2 1.4 7.7 6.9 6.9 CESC (CESC) 449 668 Buy 5,945 22.6 44.5 66. 19.9 1.1 6.8 8.1 7.8 5.9 9.4 9.4 12.1 3.1 8.6 11.4 Tata Power (TATPOW) 61 74 Hold 16,471.6 4.3 6.2 98.2 14.2 9.9 7.5 6. 5. 11.3 13.4 15.9 1.3 8.8 12.4 ICICI Securities Ltd Retail Equity Research Page 9
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ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned in the report in the past twelve months. ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts have any material conflict of interest at the time of publication of this report. It is confirmed that Chirag Shah PGDBM and Anuj Upadhyay MBA, Research Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. ICICI Securities or its subsidiaries collectively or Research Analysts do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report. Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report. It is confirmed that Chirag Shah PGDBM and Anuj Upadhyay MBA, Research Analysts do not serve as an officer, director or employee of the companies mentioned in the report. ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. 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