GE Vernova T&D

GE Vernova T&D India Limited delivered a strong financial performance in Q3 FY25, with revenues growing 28% year-on-year to INR10.7 billion. This growth translated into a significant 80% increase in EBITDA, reaching INR1.8 billion, and an expansion of EBITDA margins to 16.7% from 11.5% in the prior year. Profit Before Tax (PBT) also surged to INR1,899 million, representing 17.7% of revenue, compared to INR730 million (8.7% of revenue) in Q3 FY24, indicating strong operational leverage and efficiency.

The company achieved a record order backlog of INR107.8 billion as of December 2024, marking a substantial 72% increase from March 2024, which provides strong revenue visibility for the next 2-2.5 years. Q3 FY25 saw order bookings of INR20.8 billion. On a like-to-like basis, excluding a large exceptional order from the previous year, Q3 order booking grew 32%. For the nine-month period, total order inflows reached INR77.8 billion, a 75% increase year-on-year, demonstrating continued strong demand.

Key operational successes in the quarter included the commissioning of Reliance Jamnagar Phase 1, a 400 kV GIS project for Adani in Khavda for renewable energy evacuation, and a 400 kV AIS switchyard at Lohardaga for Power Grid. The company also completed the Dhalkebar 400 kV GIS project, enabling hydropower evacuation from Nepal to India. The order backlog composition highlights a strong focus on the private sector (68%), with central utilities/PSUs contributing 28% and state utilities 4%.

To meet the accelerating demand in the power sector, GE Vernova T&D India Limited is actively evaluating and undertaking capacity expansions. Brownfield expansion is already in progress at its transformer factory, and the company is exploring similar opportunities for other product lines. A capex of INR800 million (₹80 crores) is planned for FY25-26, indicating a strategic investment to enhance manufacturing capabilities and ensure readiness for future growth.

The company reported a robust cash and cash equivalent balance of INR8.6 billion as of December 2024, a significant increase from INR2.8 billion in March 2024. Cash generation for Q3 FY25 was INR1.9 billion, contributing to a total of INR6.4 billion for the nine-month period before dividend payment. Management stated that the Board is evaluating options for deploying this surplus cash, with current investments primarily in cash pools and fixed income securities, alongside other income from tax refunds and bad debt recovery.

Management acknowledged that the supply chain, particularly for raw materials and components, presents a challenge, noting that global players feed the entire world and current capacity increases are insufficient to meet demand. While Q3 export revenue saw a 29% year-on-year dip, attributed to project phasing, the company expects a pickup in coming quarters. The long-term target is to maintain 30% of order inflows from exports, including those from group entities, leveraging India's cost-competitive structure.

GE Vernova T&D India Limited is actively pursuing new growth avenues, including the STATCOM market, which is estimated to be between INR3,000-3,500 crores, and is participating in relevant bids. The company also reiterated its strong position in the HVDC segment, having secured global orders, and sees equally good prospects in India, despite tender delays like the Leh Ladakh project being attributed to Powergrid rather than EPC capabilities.