State-run Power Grid Corporation of India Ltd., which posted a 14.4 percent jump in second-quarter profit, said it expects to commission around Rs 30,000 crore worth of transmission line projects for FY18.
Net profit in the second quarter rose to Rs 2,141 crore in the three months through September, the company said on Thursday. That compared to the Rs 2,129 crore consensus estimate of analysts tracked by Bloomberg. The bottom line rose despite a 19 percent increase in total expenses due to a higher employee benefits cost of around Rs 329 crore, the company's exchange filing showed.
The Gurugram-based company was able to commission projects worth Rs 13,500 crore, surpassing the earlier estimate of Rs 9,100 crore, Chairman and Managing Director IS Jha told BloombergQuint in an interview. “This despite it being monsoon season. And that’s why we are sure that we would be able to complete our target of Rs 30,000 crore worth of projects this year,” Jha said. The company has a target of commissioning more than 20,000 kilometer of transmission lines.
Revenue from operations increased 16 percent year-on-year to Rs 7,250 crore during the quarter, around Rs 125 crore lower than the forecast. Operating income rose 15.6 percent to Rs 5,604 crore from same period year-ago. Margin, meanwhile, contracted by 30 basis points to 89.3 percent.
- Transmission: Increased 15.78 percent to Rs 7,063.42 crore
- Consultancy: Declined 24.87 percent to Rs 115.85 crore
- Telecom: Increased 21.26 percent to Rs 173.78 crore
The Big Railways Bet
Jha said the company is expecting to see a significant uptick in projects coming from the railways.
The Indian Railways has a target of completing 30,000 km of railway electrification by 2021-2022.
Power Grid has already received project for about 786 kilometers of route length and “further railway has proposed to do more 2,000 km route length of railways for electrification,” said Jha.
Setting Up Intra-State JV
PowerGrid is setting up a joint venture with Uttar Pradesh Transmission Company. “The talks are still going on and it is yet to be finalised," Jha said adding, "it is for projects worth Rs 4,000 crore,” Jha said. The company already has a joint venture with the state of Bihar and expects additional projects worth Rs 2,000 crore coming its way.