Power Grid’s Rally Pauses But Momentum Signals Stay Strong; SEBI Analyst Flags Buy-On-Dips Strategy
The analyst cited strong fundamentals, a healthy dividend yield, and continued leadership in India’s power transmission space.
Shares of Power Grid Corporation of India fell 1.4% on Monday, ranking among the top losers on the Nifty 50 index. The decline came after the stock’s recent breakout above the ₹285–₹286 resistance zone and a strong rally last week that lifted it near short-term highs.
Technical Setup
SEBI-registered research analyst Deepak Pal said Power Grid’s technical setup remains bullish despite the mild correction. The stock recently posted a long green candle and reclaimed all key short-term moving averages (14-day, 20-day, and 50-day exponential and simple moving averages) before pausing on Monday.
Pal noted that the Relative Strength Index (RSI) at 55.79 continues to trend positively, indicating strength without being overbought.
The Moving Average Convergence Divergence (MACD) is close to a bullish crossover, and the Parabolic SAR dots remain below the price, signaling the continuation of an uptrend. He identified immediate resistance at ₹292 and near-term support in the ₹281–₹282 zone.
Fundamental View
Power Grid ended FY25 on a high with a revenue of ₹45,792 crore and a net profit of ₹15,521 crore. The company has also sustained healthy margins, as its profits account for almost a third of the revenues, while the operating margin is above 82%.
The balance sheet appears robust, with a book value of ₹99.63/share and a dividend yield of approximately 3.1%, driven by a payout ratio of 54%.
Total debt is at ₹1.30 lakh crore, while the cash flow/share of ₹38.95 indicates the company’s ability to generate cash from operations.
As of June, the promoters hold a stake of approximately 51.34% in the company, foreign investors own 26.51%, domestic institutions own 18.55%, and retail shareholders own about 3.6%.
Operational Strength And Sector Drivers
Power Grid continues to dominate India’s power transmission landscape, maintaining over 99% network availability and handling 84% of interstate power transfer capacity (99,580 megawatts). Its telecom division operates a 100,000+ km fiber network across 3,000 towns under the BharatNet initiative.
Pal highlighted that the company has recently secured the Parli–Bidar transmission project from RECPDCL, thereby boosting order visibility. It also received the ISGF Innovation Award 2025 for its smart grid technology and donated electric buses to AIIMS as part of its CSR program.
He said sectoral tailwinds from renewable expansion, index reweighting, and festive demand continue to support the broader power space, even as investors rotate into defensive and high-dividend names.
Trading Strategy
Short-Term View: Deepak Pal advised buying on dips around ₹286–₹287 with a stop-loss below ₹281, targeting ₹292–₹295 initially and ₹299–₹305 if momentum extends.
Long-Term View: He said Power Grid remains a “core holding” for investors seeking steady growth, strong dividend yield, and predictable cash flows. Pal maintained a positive outlook for 1–3 years, backed by the company’s consistent performance and expanding role in India’s renewable energy infrastructure.
What Is The Retail Mood?
On Stocktwits, retail sentiment was ‘bearish’ amid ‘high’ message volume.
Power Grid’s stock has declined 8% so far in 2025.
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