Shares of Manila Electric Co. (Meralco) rose last week as investors reacted to announcements of the company's modernization initiatives, including US-based Itron, Inc., analysts said. This also includes a partnership with India Inc., aimed at strengthening its distribution network.
Data from the Philippine Stock Exchange (PSE) showed that Meralco was the seventh most actively traded stock for the week, with 1.98 million shares worth P1.15 billion changing hands. Its share price rose 3.9% week to week to P579 on Friday from P557 last week, outperforming both the industrial index and the benchmark PSE index, which slipped 0.4% and 1.7%, respectively.
Year to date, the stock has gained 18.6% from its closing price of P488 at the end of 2024.
The power distributor last week announced plans to install 1,500 kilometers of underground distribution cables in key areas and deploy smart meters in Metro Manila through a partnership with Itron.
“These are certainly positive developments, which [showed] Meralco’s stock performance was boosted by investors welcoming its push for smarter and more reliable power systems,” Regina Capital Development Corp. sales head Luis A. Limlingan said in a Viber message.
Meralco's first vice president and network head Froilan J. Sevet said the underground cable project will be implemented in the first regulatory period of the company's multi-year capital expenditure plan. Meralco plans to file its application for the first term with the Energy Regulatory Commission by January 2026.
The utility giant said the undergrounding initiative will prioritize heavily trafficked areas such as business districts, heritage sites, tourist destinations and hurricane-prone areas.
Diversified Securities, Inc. Trader Aniceto K. Pangan said undergrounding the lines would reduce power losses and improve network resiliency during storms.
Meanwhile, the Itron partnership will introduce advanced metering infrastructure that will allow real-time monitoring of electricity usage and faster outage response. The system is compatible with multiple meter brands, making it scalable across Meralco's franchise area. About 73,000 meters are scheduled for installation in Metro Manila in the first phase.
Mr Limlingan said that although sentiment was upbeat, investors also weighed in on the project's “huge capital expenditure and regulatory hurdles”.
He said some investors are paying attention to Meralco's upcoming earnings report, which is expected to reflect “solid” third quarter results.
In the first half, Meralco's net income rose 5.3% year-on-year to P23.64 billion, while consolidated revenues rose 3.3% to P245.22 billion.
Mr Pangan said higher electricity rates in October may also have supported the stock's performance. Meralco's overall rate increased by P0.2331 per kilowatt-hour (kWh) to P13.3182 per kWh after a decrease of P0.831 per kWh in September, mainly due to higher production costs and peso depreciation.
For this week, Mr. Limlingan placed the stock's support level at P595-P600 and resistance at P570-P560, while Mr. Pangan estimated immediate support at P545 and resistance at P595.
Meralco's controlling stakeholder, Beacon Electric Asset Holdings, Inc. Partially owned by PLDT Inc. is near. Hastings Holdings, Inc., a subsidiary of PLDT Beneficial Trust Fund MediaQuest Holdings, Inc. Is a unit of, is interested in. businessworld Through the Philippine Star Group, which he controls. , Matthew Miguel L Castillo
