Power Grid Corporation of India Ltd Q3 FY22 Earnings Conference Call Insights

Key highlights from Power Grid Corporation of India Ltd (POWERGRID) Q3 FY22 Earnings Concall

Q&A Highlights:

• Mohit Kumar asked if the company’s capex target changed for FY23 after the new identified cost plus element. K. Sreekant, MD replied that it is under review and the company is looking to increase it. It will be up at least by INR1,000 crore.  For the current year, the company has targeted INR7,500 crores.

• Mohit Kumar also asked about the bidding activity under smart metering and when this line of business is expected to see the momentum. K. Sreekant, MD replied that the government has identified about INR[30] crores to be done by the CPSUs through MOU routes; those discussions are in progress. The company believes there is potential.

• Mohit Kumar asked if the company is looking to monetize other assets in the next fiscal. K. Sreekant, MD replied that in the NMP pipeline the company has a target and a trajectory given which it will be following. The only deviation likely is that this year, POWERGRID has another 26% in one of the companies to be monetized in February.

• Devanshu asked if the investment towards setting up solar power generation transmission system as well as smart metering etc. be on regulated ROE regime and if not the payback period for such investments. K. Sreekant, MD said that the smart metering system is having a life of about 7.5 months operation and 2.5 years construction.

• Deepika Mundra asked that the pipeline of transmission projects, why there is no change from INR26,000 crores despite some green energy corridor and interstate projects getting Cabinet approval. K. Sreekant MD said that most of those are in the intrastate segment. What the Cabinet has approved the green corridor is the intrastate segment and that is what is going to be built by the utilities themselves. Therefore, a limited amount of that may come to the TBCB market.

• Deepika Mundra also asked when is the INR6,000 crore of smart metering capex to commence and duration of the capex? K. Sreekant MD replied that smart metering investment is most likely to come in the next financial year. And in ’22-‘23, ’23-‘24, is where it’s seen to be panning out.

• Deepika Mundra asked about any update on distribution strengthening investment for 33 KV lines. K. Sreekant MD answered that on the ground, there is not much of a progress. Now the schemes are getting approved under the RDSS. It will still take some more time before these schemes are coming to ground because they were to submit all their schemes by December.

• Apoorva Bahadur enquired about the size of the storage component in Leh tender for the transmission line. K. Sreekant MD replied that 1 gigawatt hours is the size of the capacity.

• Apoorva Bahadur also asked about on the future storage tender, if the company would go for stand-alone storage projects as well or stick to transmission lines. K. Sreekant MD answered that the recent guidelines of the government have made storage very neutral and made it an independent storage service provider also. So as POWERGRID gain experience in this, the company will look at those opportunities.

• Rohit Natrajan asked about the size of the Leh transmission project and how much of that will be added to work in hand. K. Sreekant MD said the Leh transmission project is about INR26,000 crore and once approved that will add to the work in hand. It’s a five year kind of project.

• Sudeep Mitra enquired that over the next 2-3 years, what kind of a ballpark number could be added to the basket of INR 21,000 crores that could come under the TBCB pipeline. K. Sreekant MD replied that around INR15,000 crores kind of transmission investment can be expected on an annual basis.