The ABB-BHEL consortium has won the Raigarh-Pugalur UHVDC order from PGCIL with a large portion of ABB’s Rs 43 billion work share expected to flow through ABB India. While the competition in the space may remain limited to Alstom and Siemens, there exists the risk of time and cost overruns on right-of-way issues.
The same possibly led to the six-month delay in ABB accepting the order from PGCIL. We revise EPS estimates upwards by 2-4% and roll over to December 2018E for a target price of Rs 1,050.
The ABB-BHEL consortium has won Rs 58-bn order from PGCIL for ±800 kV/6,000 MW Raigarh- Pugalur UHVDC transmission line in India. This order is ABB’s sixth HVDC project in India and second UHVDC project after the North-East – Agra HVDC line that is in the final stages of completion.
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An analysis of previous HVDC project awards indicates the bidding competition has been limited to the three MNC players namely ABB, Alstom and Siemens. This situation may persist in the future as well given the technological barriers for HVDC transmission.
