GE Vernova T&D India Q1 FY27 earnings call

GE Vernova T&D India Limited reported a robust 38% year-on-year revenue growth, reaching INR1,840 crores in Q1 FY27, up from INR1,330 crores in Q1 FY26. This growth outpaced new orders, leading to a 2.5% sequential moderation in the order backlog to INR20,930 crores as of June 2026. However, the order backlog still provides over 3 years of revenue visibility based on FY26 performance. Order inflow for the quarter stood at INR1,140 crores, a 30% year-on-year decline from INR1,620 crores, primarily attributed to lower TBCB realization in Q4 FY26.

The company experienced gross margin moderation to 41.3% in Q1 FY27, down from 48.4% in Q1 FY26 and 45.3% for the full FY26. This 4 percentage point delta was due to a 1-1.5% impact from a lower export revenue share (30% in Q1 FY27 vs 33% in FY26), elevated commodity prices reducing execution savings, and the ramping up of lower-gross-margin HV business. Despite this, the EBITDA margin remained strong at 25.1%, consistent with the company's mid-20s guidance, as operating leverage largely offset the HV business impact.

Operationally, GE Vernova T&D India Limited commissioned the first 400 kV substation in Nepal for NEA Khimti and partnered with Adani for substations evacuating renewable power from the Khavda solar park. The 'India for the World' strategy continues to yield results, with exports contributing a significant 46% to the Q1 FY27 order inflow. This diversification includes securing CTs and CVTs from GE Vernova's North American entities and 400 kV GIS orders from Spain and Morocco, alongside orders for grid automation packages and transformers for semiconductor customers.

Two significant RPT-approved orders faced delays: a INR1,300 crore US data center order is still under discussion and expected to be booked in Q2 or Q3 FY27, while a INR3,000 crore project has been put on hold by the customer due to budget issues, requiring re-approval. The HVDC pipeline, though strong, is experiencing slight delays in its pace of awards. Management remains confident in the overall HVDC pipeline but acknowledges the slower conversion.

The company generated INR430 crores in cash during Q1 FY27, bringing its total available cash to INR2,930 crores, maintaining a continuous zero-debt position. A utilization plan of INR1,300 crores has been announced, comprising INR1,000 crores for capacity expansion (announced last FY and tracking on schedule) and INR250 crores for dividends in Q2, subject to approval. Management is actively evaluating options for the remaining INR1,600 crores surplus cash to optimize shareholder returns.

The domestic TBCB pipeline, which was soft from January to March, has shown improvement in June-July, with large projects currently being decided. The company anticipates 6-7% growth in the overall TBCB market for the year. While new Chinese players have been approved, their impact on competition and pricing, especially concerning local content requirements, is yet to be fully understood. Management believes global energy transition demand will balance domestic capacity additions, preventing an oversupply situation.