India's Power Grid's profit slips on subdued transmission demand

BENGALURU, July 31 (Reuters) - State-owned utility Power Grid Corporation of Indias (PGRD.NS) first-quarter profit fell more than 5% on Monday, hurt by weaker demand in its core transmission business.

The companys consolidated profit was 35.97 billion rupees ($437.42 million) in the quarter ended June 30, compared with 38.01 billion rupees a year earlier.

A surge in summer power demand, which had strained Indias electricity transmission system, eased in the April-June period owing to a cooler pre-monsoon.

Power Grids consolidated revenue from operations in the quarter rose 1.3% to 110.48 billion rupees, with its transmission business growing 1.2%.

\“Demand growth was tepid due to higher base and inconducive weather conditions,\” said Rupesh Sankhe, research analyst at brokerage Elara Capital.

Consolidated total expenses for Power Grid, which transmits nearly half of the power generated in the country, slipped more than 3% to 66.89 billion rupees in the quarter.

Its net profit margin fell to 33% from 35% a year earlier.

The spotlight remains on the managements commentary on capital expenditure, updates on Africa and of high-voltage direct current transmission projects, said Rohit Natarajan, research analyst at Antique Stock Broking.

Power Grids board of directors also recommended issue of one bonus shares for every three shares held.

Shares of the company closed 3.04% higher ahead of the results announcement.

($1 = 82.2320 Indian rupees)