Power Grid Q4FY26: Revenue down 5%, stock slips 4%

Stock reaction: 4% drop despite profit growth

Power Grid Corporation of India shares came under pressure on the BSE after the company reported its March quarter (Q4FY26) results after market hours on Friday. The stock slipped about 4% intraday and hit a low of ₹293.45 per share. By 9:30 AM, it recovered marginally but was still down 3.89% at ₹293.95 per share on the BSE. The move stood out against broader weakness, with the BSE Sensex down 1.15% at 74,374.04 around the same time. The selling reflected investor focus on the revenue decline and margin commentary, even as profit rose year-on-year. Power Grid is a regulated utility, so quarterly prints often get judged on operational metrics and cost movement rather than only headline profit.

What the company reported for Q4FY26

For Q4FY26, Power Grid reported a 9.7% year-on-year increase in net profit to ₹4,546.33 crore, compared with ₹4,142.87 crore in the year-ago quarter. Revenue from operations fell 4.9% to ₹11,665.61 crore from ₹12,275.35 crore a year earlier. Total income for the quarter came in at ₹11,970.69 crore versus ₹12,590.8 crore in the corresponding period last year. Expenses rose year-on-year, with total expense at ₹8,069.36 crore compared with ₹7,549.92 crore in the year-ago quarter. The combination of lower revenue and higher expenses set the context for the market’s negative reaction.

Dividend update: final dividend of ₹1.25 per share

Alongside the results, the board of directors approved a final dividend of ₹1.25 per share. The announcement translated into a full-year dividend of ₹9 per share, as stated in the update. Dividend declarations remain a key tracking point for Power Grid because the stock is widely held for income and stability. Even so, the session’s trading suggested the market prioritised the quarterly operating picture. Investors also tend to evaluate whether dividend payouts are supported by steady operating performance, especially in a period of changing costs and project execution cycles.

Brokerage read-through: Motilal Oswal flags revenue miss

Motilal Oswal Financial Services said in its results note that Power Grid reported standalone revenue of ₹9,970 crore, down 9% year-on-year. The brokerage added that the revenue missed its estimate by 19%. On operating performance, it noted standalone Ebitda at ₹7,500 crore, down 19% year-on-year and 31% below the estimate. Such variance versus estimates can influence the immediate stock reaction, particularly for a large index constituent where expectations tend to be tightly priced in. The note also pointed to a weaker operating outcome compared with what the brokerage had modelled.

JM Financial: weak revenue print and margin miss

JM Financial Institutional Securities also described the Q4FY26 results as weak, citing revenue below its consensus. It highlighted a miss on Ebitda margin as well, quantified at a decline of 557 basis points year-on-year and 652 bps versus JM Financial estimates. The brokerage further said profit after tax (PAT) was an “optical beat” on account of tax expenses and a regulatory deferral account. This framing matters because it implies that the quality of earnings is being debated, even if the headline profit growth is positive. For a regulated transmission utility, the market often looks through one-off items to underlying operating trajectory.

Margin compression and the “mixed picture” commentary

The provided commentary on the results described a mixed picture: a 9.74% increase in net profit to ₹4,546.33 crore, but a 4.97% decline in net sales and “significant margin compression.” It also cited operating margin excluding other income compressing to 77.71%, described as the lowest level in seven quarters, compared with 83.29% in the previous year. Operating profit before depreciation, interest, and tax was stated at ₹9,065.61 crore. These data points align with the broader narrative that costs and margins drew more scrutiny than the profit growth number alone.

Tax reversal and how it can change the headline impression

Another item in the same commentary was an extraordinary tax reversal of ₹4,391.11 crore, resulting in a negative tax rate that “significantly inflated the net profit figures.” It added that excluding this exceptional item, the underlying operational performance pointed to pressure on profitability metrics. This is relevant because the market often adjusts for such items when assessing sustainable earnings. It also explains why some broker notes focused on margins and operating performance rather than only bottom-line growth.

Balance sheet indicators mentioned in the note

The same results commentary referenced a return on equity of 15.37%, positioning it as reasonable capital efficiency for a utility company. It also flagged interest coverage ratio declining to 4.17 times, described as the lowest level in recent quarters. These indicators can influence investor comfort in a capital-intensive business, particularly when expenses are rising and operating metrics are under pressure. For Power Grid, financing costs and debt servicing capacity are regularly monitored because large transmission projects require significant capital and long payback periods.

Why the market focused on revenue and costs

The session’s price action suggests investors reacted to the year-on-year revenue decline and the rise in expenses, despite the improvement in reported net profit. When revenue from operations falls 4.9% year-on-year and total expenses rise from ₹7,549.92 crore to ₹8,069.36 crore, the gap can affect margins and prompt questions on cost control. Brokerages also highlighted misses versus estimates on revenue and Ebitda, which tend to drive near-term stock moves. And the mention of tax-related effects reinforced the view that the headline profit number may not fully reflect operating momentum.

Key numbers at a glance

Conclusion

Power Grid’s Q4FY26 print delivered higher reported net profit but also showed a year-on-year decline in revenue from operations and a rise in expenses. Brokerages pointed to revenue and Ebitda misses versus estimates and highlighted margin pressure, while the results commentary also referenced a large tax reversal affecting reported profitability. The final dividend announcement of ₹1.25 per share, taking the full-year dividend to ₹9 per share, added an income marker for shareholders. Near-term focus is likely to remain on operating trends, margins, and how much of the quarter’s profit outcome was driven by tax and accounting effects versus core performance.