Prabhudas Lilladher has issued a buy rating on Power Grid Corporation of India with a target price of ₹331 in its research report dated August 08, 2026. According to the brokerage's analysis, the stock offers an attractive dividend yield of ~4% despite recent performance challenges.
The company's Q1FY27 consolidated adjusted PAT stood at ₹36 billion, which was broadly flat year-on-year and 6% below Prabhudas Lilladher's estimates and 7% below Street estimates. As reported by Prabhudas Lilladher, the lack of PAT growth was largely attributed to a one-off gain of ₹2.3 billion in Q1FY26. However, adjusting for this one-off item, Q1FY27 PAT growth works out to approximately 6% year-on-year.
Rising capitalisation, work-in-hand, transmission opportunity pipeline provide visibility for future growth, as highlighted by recent management commentary. The management expects supply stress to be considerably lower than previously, indicating improved operational conditions ahead. This positive outlook is supported by the company's capitalization remaining healthy at ₹53 billion, achieving 18% of its FY27 target of ₹300 billion, while capex stood at ₹78 billion, representing 21% of the FY27 target of ₹370 billion.
New order inflows in Q1FY27 stood at ₹105 billion, compared with nil in FY26, as the Leh HVDC project was removed in Q4FY26. Management highlighted an upside risk to its FY27 capitalization guidance, although greater clarity is expected only post Q3FY27 results. The company's order book including CWIP provides strong visibility for future growth, supporting the positive investment thesis despite recent performance challenges.
Following the results, Prabhudas Lilladher has marginally cut its FY27E/28E EPS estimates by 1%, factoring in lower ROE from TBCB projects. The brokerage has revised its target price to ₹331 (2.7x FY28 book value) while retaining its buy rating. The combination of strong execution capabilities, robust pipeline visibility, and improving operational conditions supports the positive long-term outlook for Power Grid Corporation of India.
