Power Grid Corporation of India Ltd (POWERGRID) Q1 FY27 Earnings Call: Record Works-in-Hand of Rs. 1.75 Lakh Cr, Guides Rs. 37,000 Cr FY27 Capex

Power Grid Corporation of India Ltd held its Q1 FY27 earnings call on August 05, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Headline Performance Amid Regulatory Drag

• Consolidated total income of Rs.11,697 crore in Q1 FY 2026-2027, with transmission charges at Rs.10,905 crore (+3% YoY) and PAT at Rs.3,598 crore (vs Rs.3,631 crore in Q4 FY 2025-2026).
• Standalone EPS of Rs.3.87 and book value of Rs.111.85 per share; gross fixed assets rose to Rs.3.25 lakh crore from Rs.2.92 lakh crore.
• Transmission lines commissioned: 1,635 circuit km (35% of FY 2025-2026 achievement) and transformation capacity added of 10,500 MVA in Q1 FY 2026-2027.
• Capitalization of Rs.5,277 crore in Q1 FY 2026-2027 (3.13x vs Q1 FY 2025-2026's Rs.1,683 crore), adding Rs.788 crore to the top line and Rs.247 crore to PAT.
• Collections at 104% of billing — Rs.10,963 crore billed, Rs.11,404 crore realized; receivable days improved to 12 from 19.41 in the previous quarter.
• Regulatory revenue reduction of Rs.560 crore masked a potential PAT increase of Rs.247 crore, keeping profit growth flat despite Rs.28,000 crore of capitalization in FY 2025-2026.
• Green loan of Japanese Yen 80 billion signed with JBIC for sustainability-linked financing.

Record Works-in-Hand and Sectoral Tailwinds

• Works in hand of Rs.1.75 lakh crore — comprising TBCB Rs.1.46 lakh crore, RTM Rs.25,000 crore, and other Rs.4,200 crore; CWIP at Rs.50,000 crore as of Q1 FY 2026-2027.
• TBCB wins through July 2026: 6 projects out of 19 bid (cumulative win rate of 47% for ISTS), with total gross annual tariff of ~Rs.2,200 crore; first-of-its-kind synchronous condenser project (400 kV, two units at Fatehgarh 2) secured.
• Bidding pipeline of Rs.1.19 lakh crore — under bidding Rs.73,875 crore, to be floated Rs.45,000 crore; management expects the Government of India's "estimated Rs.7.9 lakh crore capex for transmission by 2035-2036" to be bid out over the next ~3 years (by FY 2029-2030).
• CEA/Ministry's National Electricity Plan targeting "900+ GW by 2035-36" cited as a long-term sector driver, with Brahmaputra hydro potential of Rs.6.4 lakh crore and data center demand of 71 GW.
• New awards of Rs.2,200 crore of annual revenues in FY 2026-2027 (year to date); NCD CAPEX estimates to be shared separately.
• Land compensation under new Ministry of Power guidelines not factored into the Rs.7.9 lakh crore estimate and could increase project costs, especially in high-urban areas.

CERC Tariff Trajectory and Earnings Drag

• Rs.560 crore regulatory drag on Q1 FY 2026-2027 earnings — comprising Rs.330 crore from lower depreciation and interest due to normative depreciation and regulatory differences, and Rs.230 crore from the absence of interest income on the differential between the company's filing and the CRC order date.
• CERC's tariff trajectory recognizes cost of debt and depreciation over 12 years, after which only equity remains, causing tariff to decline; management noted that assets capitalized around FY 2014-2015 will continue to affect depreciation and tariff.
• Interest accrues at SBI MCLR plus 100 bps on delayed tariff orders, providing additional revenue until orders are issued; in Q1 FY 2025-2026 this amounted to Rs.230 crore, but is not material in Q1 FY 2026-2027 as CERC issued orders during FY 2025-2026.
• No disallowance of costs by CERC — management clarified the tariff difference vs. the R filing is due to the unwinding of the interest component, not a cost disallowance.
• For adjusted profit comparison: add back the non-recurring Rs.230 crore (Q1 FY 2025-2026 interest) to Q1 FY 2026-2027 profit, and reduce the base (Q1 FY 2025-2026) profit by Rs.33 crore for a write-back provision related to KSK Mahanadi.
• Regulatory approval delays may affect ~Rs.300 crore of receivables (period unspecified), per management's discussion on asset utilization.

Rs.37,000 Crore Capex Target and Easing Bottlenecks

• Capex guidance of Rs.37,000 crore for FY 2026-2027; Q1 FY 2026-2027 capex was more than 10% of that target. Capitalization guidance of Rs.30,000 crore for FY 2026-2027, with Q1 at Rs.5,277 crore — management sees potential upside to the full-year guidance citing projects like Koppal, Gadag, and Bikaner-Mahasram.
• Of the Rs.13,000 crore equity invested in TBCB (operational and under-construction), the entire amount was funded through Power Grid's own equity and cash — not through debt at the standalone or parent level.
• Transmission line implementation timelines revised by the government from 18 months to 26–30 months to address execution delays.
• Equipment supply constraints for high-capacity transformers and GIS substations are easing, helped by Power Grid's bulk procurement approach and the government recently allowing a few Chinese companies to bid.
• Land compensation guidelines under new Ministry of Power rules (adopted by Delhi, Haryana, Gujarat, others) are expected to reduce right-of-way challenges once fully adopted by states, though urbanization remains an obstacle.
• Equipment prices for transformers have stabilized and may moderate further with additional vendor capacity, positively impacting earnings; raw material costs remain a key factor.

High-Voltage Direct Current and Storage Integration

• Strong HVDC pipeline expected — one project already in the pipeline and traction for another by FY 2026-2027; the CEA's 900 GW report includes 14 HVDC projects, and the Brahmaputra basin has about 6 HVDC projects.
• International HVDC projects linking Sri Lanka, Andaman, and Myanmar under active consideration; management noted that "One Sun, One World, One Grid" is a logical long-term extension but progress is "dependent on bridging diplomatic relations with other countries."
• CERC amended tariff regulations to allow transmission developers like Power Grid to develop integrated storage systems (BESS); Power Grid has filed petitions with the Northern and Western RPCs to develop BESS projects under Section 62 of the Electricity Act.
• First-of-its-kind synchronous condenser project (400 kV, two units at Fatehgarh 2) secured under TBCB, supporting grid stability with rising renewable penetration.
• Incremental grid strengthening projects due to rising renewable penetration (e.g., adding inertia) are already included in the total Rs.7.9 lakh crore pipeline.
• HVDC project timelines depend on technology evolution, system availability, significant costs, and planner decisions; management does not see BESS as a direct replacement for HVDC, as each has its own utility.

Telecom, Consultancy, and ESG Milestones

• Telecom revenue of Rs.391 crore in Q1 FY 2026-2027; first international long-distance link to Nepal commissioned, and connectivity to Andaman & Nicobar via PowerTel established.
• Consultancy revenue of Rs.252 crore in Q1 FY 2026-2027 with 16 domestic and 3 international orders; Power Grid's consultancy footprint now spans 25 countries.
• 50% electricity from renewable energy achieved in calendar 2025; zero waste to landfill at 90% and net water positive at >50% achieved; management reiterated the "net zero target by 2047 with 20% reduction already achieved."
• Green loan of Japanese Yen 80 billion signed with JBIC, supporting sustainability-linked capital expenditure.
• In TBCB subsidiaries, YoY depreciation increase of 27% (vs gross block increase of 67%) is explained by the shift to lease accounting (depreciation replaced by amortization); management confirmed no impact on reported PAT.
• Regulatory adjustment in standalone business — management did not provide the gap between normative debt and actual debt on operating regulated assets but will revert with the information.