Power Grid Raises FY26 Capex Target to ₹35,000 Crore

Introduction

Power Grid Corporation of India (PGCIL), the country's largest electric power transmission utility, has increased its capital expenditure (capex) guidance for the financial year 2025-26 to ₹35,000 crore. The state-owned company also raised its capitalisation target for the year to ₹25,000 crore. This upward revision, announced in a presentation to stock exchanges, signals the company's confidence in its project execution capabilities and a strong growth outlook driven by India's expanding energy needs.

A History of Upward Revisions

The latest guidance marks the second upward revision for PGCIL in FY26. The company's initial capex plan for the fiscal year was set at ₹28,000 crore. This was first increased to ₹32,000 crore on February 2, 2026, before being raised again to the current ₹35,000 crore. Similarly, the capitalisation target, which represents the value of projects commissioned and added to the revenue-generating asset base, was initially ₹20,000 crore. It was subsequently revised to ₹22,000 crore in February and has now been set at ₹25,000 crore. These consistent increases reflect better-than-expected progress in project implementation and a clear visibility of future opportunities.

Strong Execution Underpins Confidence

Power Grid's decision to raise its targets is backed by solid on-ground performance. As of March 22, 2026, the company has already incurred a capex of ₹35,540 crore, achieving 102% of its latest revised guidance even before the financial year has concluded. On the capitalisation front, PGCIL has achieved ₹22,749 crore, which accounts for 91% of the new target. The company attributed this performance to its execution efficiency and adaptability, which have allowed it to navigate a challenging project environment and deliver on its investment plans. Over the FY21-FY26 period, the company has incurred over ₹1 lakh crore in capex and capitalised assets worth over ₹90,000 crore.

Operational Milestones in FY26

The strong capitalisation figures are a direct result of significant operational achievements during the fiscal year. PGCIL has successfully commissioned 4,239 circuit kilometres of transmission lines. In addition, it has added a transformation capacity of 60,370 megavolt-ampere (MVA) and commissioned eight new substations. This physical infrastructure expansion is crucial for strengthening the national grid and is expected to support continued growth in capitalisation. With this momentum, the company's gross fixed assets are projected to cross the ₹3 lakh crore mark in FY26.

A Look at the Future Pipeline

Looking beyond the current fiscal year, Power Grid has outlined a robust multi-year investment runway. For the near term, covering FY27 and FY28, the company has planned a capex of approximately ₹82,000 crore, with a corresponding capitalisation projection of about ₹65,000 crore. Over the longer term, PGCIL anticipates its annual capex to average above ₹40,000 crore and capitalisation to average over ₹35,000 crore, contingent on project awards and execution timelines. The company's works-in-hand currently stand at over ₹1.48 lakh crore, which includes projects worth over ₹49,000 crore already under construction, providing strong revenue visibility.

Market Context and Impact

The accelerated capex is aligned with India's broader energy strategy, which focuses on integrating over 900 GW of non-fossil fuel capacity into the grid. Power Grid estimates the total transmission sector opportunity could exceed ₹15 trillion over the long term, driven by rising power demand, renewable energy expansion, and increasing grid complexity. The market has responded positively to the company's announcements, with its shares gaining following the release of the updated guidance. This reflects investor confidence in the company's ability to capitalize on the structural growth drivers in the Indian power sector.

Analysis

The consistent upward revision of capex and capitalisation targets by Power Grid is a significant indicator of its operational strength and strategic importance. It demonstrates not only the company's ability to execute large-scale projects efficiently but also the vast opportunity landscape in India's power transmission sector. As the nodal agency for building and managing the country's inter-state transmission network, PGCIL is central to India's energy transition. The increased spending will directly support the evacuation of power from renewable energy hubs to demand centers, thereby enhancing grid stability and facilitating the shift towards cleaner energy sources.

Conclusion

Power Grid's enhanced financial guidance for FY26 underscores a period of accelerated growth and robust execution. By consistently surpassing its own targets, the company has solidified its position as a critical enabler of India's infrastructure and climate goals. With a massive project pipeline and strong government backing, PGCIL is well-positioned to sustain its growth trajectory and continue playing a pivotal role in shaping the future of the nation's power landscape.