Detailed narrative
Global Economic Outlook and India's Power Sector
The global economy faces ongoing uncertainty from new tariff measures and weak growth, with projections for global growth to moderate slightly to 2.8% in 2025 before recovering to 3% in 2026. In contrast, India's economy demonstrates robust growth, with real GDP projected at 0.2% in 2025 and 6.3% in 2026. India's power consumption increased by nearly 7% to 148.48 billion units in March 2025, and peak power demand is anticipated to reach 277 gigawatts in summer 2025. While coal demand grew by 5.5% or 14 million tonnes in 2024, India's energy-related carbon dioxide emissions rose by 3.5%, the highest among major economies, underscoring the need for stronger emission controls.
GEPIL's Strategic Transformation and Performance
GE Power India Limited (GEPIL) is successfully implementing a 4-pillar strategy focused on new growth areas, reduced working capital exposure, and long-gestation projects, which is beginning to yield positive results with narrowing losses and stabilized revenue streams. The company's standalone net worth significantly improved to INR 233 crores as of March 31, 2025, from INR 57 crores a year prior, following the strategic divestment of its Hydro and Gas businesses. This transformation has also led to a 12-point increase in actual margins on core deals, reflecting enhanced operational excellence.
Strong Order Intake and Growing Backlog
GEPIL achieved its highest-ever order intake from continuing operations since FY2019-20, securing INR 2,183 crores in FY25, nearly double the INR 1,171 crores recorded in FY24. Significant orders include FGD EP projects, Steam Turbine upgrades for NTPC and Gujarat State Electricity Corporation, and INR 548 crores in Core services. The order backlog as of March 31, 2025, expanded to INR 2,662 crores from INR 1,587 crores in the previous year, indicating a healthy and growing pipeline with a 200 basis point improvement in margin. The company also expanded its geographical footprint, securing orders from 5 countries including Saudi, Turkey, Australia, UAE, and Malaysia.
Q4 and Full-Year Financials
For Q4 FY25, GEPIL reported a revenue of INR 266 crores, an 8% increase compared to INR 247 crores in Q4 FY24. The full-year FY25 revenue remained stable at INR 1,047 crores, compared to INR 1,039 crores in FY24. Profit before tax for Q4 FY25 was INR 189 crores positive, a substantial improvement from INR 23 crores in Q4 FY24. For the full year, the company achieved a positive profit before tax of INR 224 crores, reversing a loss of INR 177 crores in FY24. These results include exceptional gains📎 of INR 219 crores in Q4 FY25 and INR 262 crores for FY25 from the slump sale of the Hydro and Gas businesses.
Q4 Margin Pressure and Durgapur Operations
Q4 FY25 saw gross margins at approximately 23%, contributing to negative EBITDA, primarily due to INR 30 crores in prolongation provisions on ongoing FGD EPC sites. This quarter also lacked the recovery of claims that had benefited previous periods. The Durgapur facility operated at 165,000 hours in FY25 against a capacity of 242,000 hours, resulting in 1/3 underutilization. Management acknowledges this pressure on the P&L and is actively working to diversify Durgapur's focus into non-coal areas like pressure vessels, cryogenics, and exports, having secured INR 18 crores in orders from these new segments in FY25.
Strong Balance Sheet and Liquidity
GEPIL maintains a robust financial position, operating as a debt-free company. As of March 31, 2025, the company reported a surplus net cash position of INR 433 crores. This includes a significant investment of INR 264 crores in a fixed deposit with a nationalized bank, placing the company in a net investment position. This strong liquidity and absence of debt provide a solid foundation for its ongoing strategic initiatives and future growth.