Draft tariff regulations (2019-24) are positive for regulated utilities as base RoE remains unchanged at 15.5% (our expectation: cut to 14%). NTPC \u2013 positives outscore Key overhang of cut in RoE is behind company \u2013 a major positive. Negative impact of decapitalisation of assets beyond useful life (>25 years) from \u2018gross to net basis\u2019 (-1.9% in core RoE) would be offset by positive impact of GCV relief (+1.8% in core RoE). With key benchmarks unchanged, tightening of certain norms (working capital, availability from annual to quarter) would be balanced by relaxation in operating norms. We upgrade NTPC to BUY with revised TP of Rs 172 with regulatory risk overdone and attractive valuations (P\/B 1.1x FY20e). Also read|\u00a0Top 10 most valued companies including TCS, RIL, HDFC Bank lose Rs 38,153 cr in m-cap PGCIL \u2013 positive on all fronts With base RoE unchanged at 15.5% and broad benchmarks unchanged, we upgrade PGCIL to BUY with revised TP of Rs 213 given regulatory clarity and compelling valuations (P\/B 1.5x FY20e). Draft policy: key takeaways Positives outscore for regulated generation companies:Base RoE unchanged at 15.5% came as a positive vs. our expectation of a cut to 14%. Change in methodology for assets which have completed useful life (>25 years) from \u2018gross to net basis\u2019 was a negative surprise, as NTPC has ~10 GW of assets which are >25 years old. This clause shall reduce NTPC\u2019s regulated equity by `60-65 bn and hit NTPC\u2019s core RoE by 1.9%. The impact would be offset by positive from relief in GCV (allowance of 85KCal for loss in quality during storage). Relief in GCV norm would incrementally add 1.8% to NTPC\u2019s core RoE. Tightening of norms (availability on quarterly basis vs. annual currently, working capital, O&M) are balanced by relaxation in few operating norms (auxiliary consumption, incentives etc). We expect NTPC\u2019s earnings to post 13% CAGR over FY18-22. Core RoE to remain at 17-18%. With regulatory overhang now behind company and compelling valuations (P\/B of 1.1x FY20), we upgrade NTPC to BUY with revised TP of Rs 172 (vs. Rs 165 earlier). All positives for regulated transmission companies: Base RoE unchanged at 15.5% and broad benchmarks retained for transmission companies (plant availability at 98%, incentive retained at 98.5%) signal an all-round positive tariff policy for PGCIL. We expect PGCIL\u2019s earnings to post 12% CAGR over FY18-22 and core RoE to remain at 17-17.5%. Upgrade PGCIL to BUY with revised TP of Rs 213 (vs. Rs 197 earlier).