About higher dividend, this has much more to do with reduced capex intensity and higher capitalizations. I have summarized the same in a previous post.
| CAPEX vs Capitalization | FY11 | FY12 | FY13 | FY14 | FY15 | FY16 | FY17 | FY18 | FY19 | FY20 | FY21 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| CAPEX | 12’005.00 | 17’814.00 | 20’037.00 | 23’158.00 | 22’456.00 | 22’584.00 | 24’429.00 | 25’791.00 | 25’807.00 | 15’313.00 | 11’284.00 |
| Capitalization | 7’313.00 | 14’100.00 | 17’213.00 | 15’904.00 | 21’760.00 | 31’788.00 | 31’000.00 | 27’928.00 | 27’325.00 | 18’234.00 | 21’467.00 |
| Capitalization/CAPEX ratio | 60.92% | 79.15% | 85.91% | 68.68% | 96.90% | 140.75% | 126.90% | 108.29% | 105.88% | 119.08% | 190.24% |
Additionally, monetization via Invit route has led to higher cash generation which has also resulted in higher dividend payouts.
About smart meters market, I do not know if it can absorb the kind of cashflows that is generated by Powergrid. In one of the previous posts, I did a breakup of revenues earned from other business ventures and it shows that none of the other businesses have scaled up to transmission revenues (<3% of overall revenues). So I will be careful of extrapolating their other business ventures.
| P&L | FY11 | FY12 | FY13 | FY14 | FY15 | FY16 | FY17 | FY18 | FY19 | FY20 | FY21 | FY11-21 Growth |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | 8’612.00 | 10’785.00 | 13’328.00 | 16’146.00 | 18’233.00 | 21’243.00 | 26’581.00 | 30’431.00 | 35’661.00 | 38’671.00 | 40’824.00 | 16.84% |
| Transmission charges | 7’903.00 | 9’544.00 | 12’211.00 | 14’327.00 | 16’999.00 | 19’808.00 | 24’630.00 | 28’844.00 | 33’894.00 | 36’532.00 | 38’499.00 | 17.16% |
| Consultancy - services | 299.00 | 290.00 | 228.00 | 333.00 | 385.00 | 466.00 | 582.00 | 491.00 | 502.00 | 514.00 | 434.00 | 3.80% |
| Telecom | 187.00 | 201.00 | 231.00 | 276.00 | 275.00 | 392.00 | 504.00 | 607.00 | 663.00 | 698.00 | 707.00 | 14.22% |
| Sucharge income | 203.00 | 309.00 | 744.00 | |||||||||
| Incentive income | 217.00 | 427.00 | 481.00 | |||||||||
| PAT | 2’697.00 | 3’255.00 | 4’235.00 | 4’497.00 | 5’046.00 | 5’948.00 | 7’520.00 | 8’198.00 | 10’034.00 | 11’059.00 | 12’036.00 | 16.13% |
Disclosure: Invested (position size here)