Meralco shares rise as investors price in upgrade plans

SHARES in Manila Electric Co. (Meralco) climbed last week as investors responded to announcements on the company’s modernization initiatives, including a partnership with US-based Itron, Inc., aimed at strengthening its distribution network, analysts said.

Data from the Philippine Stock Exchange (PSE) showed 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 by 3.9% week on week to P579 on Friday from P557 the previous week, outperforming both the industrial index and the benchmark PSE index, which slipped by 0.4% and 1.7%, respectively.

Year to date, the stock has gained 18.6% from its closing price of P488 at end-2024.

The power distributor announced last week plans to install 1,500 kilometers of underground distribution cables in key areas and to deploy smart meters across Metro Manila through a partnership with Itron.

“These are certainly positive developments, which [showed] in Meralco’s stock performance as investors welcomed its push for smarter and more reliable power systems,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Froilan J. Savet, Meralco’s first vice-president and head of networks, 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 period 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 typhoon-prone zones.

Diversified Securities, Inc. trader Aniceto K. Pangan said moving lines underground would reduce power losses and improve network resilience during storms.

Meanwhile, the Itron partnership will roll out advanced metering infrastructure allowing real-time monitoring of power use and faster outage response. The system is compatible with multiple meter brands, making it scalable across Meralco’s franchise area. About 73,000 meters in Metro Manila are set for installation in the first phase.

Mr. Limlingan noted that while sentiment was upbeat, investors also priced in the project’s “hefty capex and regulatory hurdles.”

He added that some investors were positioning for Meralco’s upcoming earnings report, which is expected to reflect “solid” third-quarter results.

In the first half, Meralco’s attributable net income grew by 5.3% year on year to P23.64 billion, while consolidated revenues rose by 3.3% to P245.22 billion.

Mr. Pangan said higher power rates in October may have also supported the stock’s performance. Meralco’s overall rate increased by P0.2331 per kilowatt-hour (kWh) to P13.3182 per kWh following a P0.831 per kWh reduction in September, mainly due to higher generation costs and peso depreciation.

For this week, Mr. Limlingan placed the stock’s support levels at P595-P600 and resistance at P570-P560, while Mr. Pangan pegged immediate support at P545 and resistance at P595.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of the PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Matthew Miguel L. Castillo