Power Grid Share price: Buy Power Grid, target price Rs 248: Motilal Oswal

Motilal Oswal has buy call on Corporation of India with a target price of Rs 248. The current market price of Power Grid Corporation of India is Rs 213.1.

Power Grid Corporation of India Ltd., incorporated in the year 1989, is a Large Cap company (having a market cap of Rs 111249.75 Crore) operating in Power sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 10359.48 Crore, up 5.38 % from last quarter Total Income of Rs 9831.00 Crore and up 8.58 % from last year same quarter Total Income of Rs 9541.13 Crore. Company reported net profit after tax of Rs 3311.62 Crore in latest quarter.

Investment Rationale
Power Grid has won INR90–100b of awards in 3Q, which is a positive, given a declining order book. Valuations at 1.5x FY22E P/BV and ~7% FY22E dividend yield remain attractive for a company with steady RoEs of ~17%. It maintains buy, with DCF-based TP of INR248/sh.

Promoter/FII Holdings
Promoters held 51.3 per cent stake in the company as of Dec 30, 2020, while FIIs held 26.7 per cent, DIIs 15.5 per cent and public and others 6.4 per cent.