Post the conclusion of the Lok Sabha elections there has been an upward movement in all PSUs and government companies. The three months' chart of the Power Grid Corporation of India stock has been range bound between Rs 180-200.
The margins are expected to expand a bit and come in at 86 percent and the profit is also expected to jump around 20 percent.
For Power Grid the most important numbers to watch out for is not profit and loss (P&L) but what the management talks about in terms of capitalisation and the capex.
In terms of capitalisation, Q3 was subdued at around Rs 7,000 crore. This quarter it is expected to pick up a bit, around Rs 8,000-9,000 crore. Some analyst are expecting a number as high as Rs 12,000 crore so that would be the key number to watch out for.
The street was a bit worried that perhaps the peak of capex is already behind so if the management comes out with a strong guidance for FY20 in terms of expectation, capex and capitalisation, it will be a bit of a positive.