*KOTAK on POWERGRID: BUY*                 

Powergrid’s earnings were better than our estimates- company reported revenues of Rs72.5bn (16% yoy, 1% qoq), EBITDA of Rs64.7bn (16% yoy, 4% qoq) and net income of Rs20.6bn (10% yoy, 4% qoq) against our estimates of Rs71.8bn, Rs62bn and Rs 19.8bn respectively. Powergrid reported a strong 10% yoy growth in net income at Rs20.6 bn.

Asset capitalization for the quarter remained strong at Rs100 bn (+50% yoy, +186% qoq) and capex of Rs56.5 bn (+7% yoy, -10% qoq), that likely took gross block to Rs1.9 tn and reduces CWIP to Rs433 bn. Investment approvals of Rs21.3 bn were given during the quarter.

Asset capitalisation is double of our expectation and more than 2.5X of last qtr (36bn) and gives strong visibility to earnings,  which remains on strong growth track.
We currently have BUY rating on the stock

*Denofwealth: PowerGrid can be 450-500 in 2 years. World's largest power transmission utility co but Most Undervalued*