Power Grid Corporation of India (PGCIL) will likely draw investor interest after the country’s biggest electricity transmission company announced the commissioning of new projects worth Rs 10,000 crore in the September quarter.
PGCIL has been able to deliver on its target of new project commissioning, called capitalisation in technical parlance, and provide investors sufficient visibility on revenue accretion. Revenue is recognised when more projects are commissioned.
The new projects add to the current asset base. Since the company is entitled to earn a fixed return of equity (RoE) on the majority of its projects, a bigger asset base results in faster earnings growth. Read More…
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