Power Grid shows it’s coping well under the competitive bid model

Shares of Power Grid Corp. of India Ltd have underperformed over the last two years, as the moderation in investments in the transmission sector resulted in a slowing down in order flow for the company.

Compared to a 5.9% gain in the Nifty 500 index, the Power Grid stock lost 7% in the last two years. As a result, price-earnings valuations have fallen below 10 times, and the stock has a dividend yield of 5%.

But things are gradually picking up. Last week, the company said it won two intra-state transmission system projects under tariff-based competitive bidding.