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    GE Vernova T&D

    GVT&D
    Capital Goods·23 May 2025
    Management Summary

    GE Vernova T&D reported a strong Q4 and full-year FY25, driven by robust demand, significant revenue growth, and expanded EBITDA margins. The company saw a substantial increase in order bookings and backlog, supported by strategic investments in HVDC manufacturing and a focus on profitable product orders. Cash generation was also strong, leading to a healthy cash balance, though provisions for litigation impacted other expenses.

    Highlights

    5

    • Q4 FY25 revenues of ₹11.5 billion, up 26% YoY, and FY25 revenues of ₹42.9 billion, up 35% YoY.

    • Q4 FY25 EBITDA at ₹2.5 billion (21.9% of revenue) and FY25 EBITDA at ₹8.1 billion (19.1% of revenue), exceeding mid-to-high teen guidance.

    • Q4 FY25 order bookings of ₹29.9 billion, up 124% YoY, with total order backlog reaching ₹126.6 billion, doubling YoY.

    • Profit Before Tax & exceptional items for FY25 stood at ₹8,197 million, a 3x increase from ₹2,631 million in FY24.

    • Cash and cash equivalent balance at ₹10.5 billion as of March 31, 2025, a substantial increase from ₹2.8 billion a year prior.

    Concerns

    1

    • Other expenses in Q4 FY25 included ₹150 million in provisions for certain litigation matters, contributing to a slightly higher expense ratio of 12.6% of sales.

    What Changed2

    vs Q1 FY26

    Guidance items6 → 8 (+2)Risks discussed3 → 4 (+1)
    Key financials

    Metrics

    11

    Periods

    2

    Q4 FY25

    5
    • Revenue
      $11.5B
      YoY+26%
    • EBITDA
      $2.5B
    • EBITDA Margin
      21.9%
    • PBT & Exceptional Items
      $2.561B
      YoY+1.5%
    • Gross Margin
      42.3%

    FY25

    6
    • Revenue
      $42.9B
      YoY+35%
    • EBITDA
      $8.1B
    • EBITDA Margin
      19.1%
    • PBT & Exceptional Items
      $8.197B
      YoY+2.1%
    • Gross Margin
      40.4%

    Order Book

    high confidence

    Total Value

    ₹ 126.6 billion

    as of 2025-03-31

    quantified
    102.0% YoY

    Inflow this qtr

    ₹ 29.9 billion

    Execution

    INR 85 billion executable within 1.5-2 years, INR 38-40 billion has 3-5 years tenure.

    Composition

    Central Utilities (Power Grid)(client type)
    Transformers & Shunt Reactors(product)
    HVDC & FACTS(product)
    Export (large orders)(geography)
    ₹ 22 billion
    Digital Software(product)
    ₹ 8 billion
    Central Utilities (share of order book)(client type)
    34.0%

    Pipeline

    L1 awaiting loa

    HVDC projects (Khavda, South Olpad, Rajasthan package) are in the upfront ordering timeline. One HVDC project is under bidding (Khavda to South Olpad). Another HVDC project proposed in National Committee of Transmission is delayed.

    "The order book momentum is strong, with significant growth across diversified customers and product categories, including large export and digital software orders."

    Source:
    Prepared remarks

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹240 crores

    Dividend

    ₹5/share (final)

    Liquidity

    Cash ₹10.5 billion

    Cash generated was ₹1.9 billion in Q4 and ₹8.3 billion during FY24-25. The company also invests surplus cash into a cash pool managed by the GEV Group, earning interest and providing flexibility.

    Guidance & targets

    8
    CategoryTargetPriority
    Capacity
    Power Transmission Capacity Increase
    35%
    		High
    Capacity
    HVDC Contract Capacity
    ₹20,000-25,000 crores
    		High
    Profitability
    EBITDA Margin
    mid to high teens
    		High
    Profitability
    Gross Margin
    sustain current level
    		High
    Order Inflow
    HVDC Project Decisions
    1-2 projects
    		Medium
    Pricing
    Pricing Environment
    stable
    		High
    Order Book Composition
    Export Mix
    30%
    		High
    Market Outlook
    Energy Transition Market Stability
    stable market
    		Medium

    HVDC Project Decisions

    next quarter / during this year
    Current1-2 projects expected to be decided this year
    TargetAnnouncement of specific HVDC project wins

    Why it matters

    HVDC is a key growth area, and securing these projects will validate the company's strategic investments and market positioning.

    But we expect at least 1 to 2 projects to get decided during this year.

    How to verify

    guidance_and_targets[category='Order Inflow'][metric='HVDC Project Decisions']

    Risks & concerns

    4
    RiskSeverity

    Supply Chain Management

    Supply chain is a big challenge due to demand explosion globally and political situations, requiring constant mitigation efforts by dedicated teams. — Management acknowledged

    high

    Global Political Situation

    Political situations globally can impact supply chain and overall market dynamics. — Management acknowledged

    medium

    Litigation Matters

    ₹150 million in provisions made for certain litigation matters in Q4 FY25. — Management acknowledged

    low

    Competition and Increasing Capacities

    Analysts raised concerns about increasing capacities by competitors and its impact on demand-supply realization, though management believes the energy transition market is stable for the next 3-10 years. — Analyst acknowledged

    medium

    Q&A highlights

    8

    “So as I explained, INR38 billion or INR40 billion of this INR127 billion, largely are the projects which have a longer tenure, as we communicated earlier. These have a tenure of 3 to 5 years of execution. Excluding that, we have about INR85 billion of order, which is executable within 1.5-year to 2-year time frame as per the contracts with the customer.”

    Clarifies the execution visibility and duration for the substantial order backlog, indicating a mix of short-to-medium and long-term projects.

    asked by Umesh Raut

    3 min read6 chapters

    Detailed Narrative

    01

    Strong Financial Performance Driven by Robust Demand

    GE Vernova T&D reported a robust financial performance for Q4 and full-year FY25. Q4 revenues grew 26% YoY to ₹11.5 billion, contributing to a full-year revenue of ₹42.9 billion, a 35% increase YoY. Profit Before Tax & exceptional item📎s for FY25 surged threefold to ₹8,197 million, reflecting strong operational leverage. The company achieved an EBITDA margin of 21.9% in Q4 and 19.1% for the full year, reaching the higher end of its mid-to-high teens target.

    02

    Doubled Order Backlog and Strategic Order Inflows

    The company witnessed exceptional order booking, with Q4 FY25 bookings up 124% YoY to ₹29.9 billion. This strong inflow led to a doubling of the order backlog to ₹126.6 billion as of March 31, 2025, compared to ₹62.7 billion a year ago. The backlog includes significant orders from Power Grid Corporation of India for transformers and shunt reactors, as well as large export orders worth ₹22 billion and digital software orders of ₹8 billion. Approximately ₹85 billion of the backlog is executable within 1.5-2 years, with the remaining ₹38-40 billion having a longer 3-5 year execution tenure.

    03

    Strategic Investments in HVDC and Capacity Expansion

    GE Vernova T&D announced a strategic investment of ₹1,400 million to establish a new HVDC manufacturing line and controls facility in Chennai and Noida, respectively. This investment is part of a larger capex plan totaling ₹240-250 crores, which also includes ₹80-90 crores for debottlenecking existing business lines. The new HVDC capacity is designed to meet the 'Make in India' criteria, enhance competitiveness, and support both domestic demand and export opportunities, with the company confirming capacity to handle ₹20,000-25,000 crores in HVDC contracts.

    04

    Improved Gross Margins and Stable Pricing Environment

    The company achieved a Q4 gross margin of 42.3% and a full-year gross margin of 40.4%, representing a 5-6% improvement over the previous financial year. Management attributed this to better pricing, an improved product mix favoring more profitable product orders over turnkey projects, increased export revenue, and strong execution. The pricing environment is currently stable, with the ability to pass on raw material increases, and the company aims to sustain these improved margin levels going forward⏳.

    05

    Market Outlook and Diversification Strategy

    India's power transmission capacity is projected to increase by 35% by FY32, providing a strong domestic growth outlook. Globally, the energy transition story is driving demand in new export markets like Europe, Australia, and the Middle East. The company is actively working to diversify its portfolio beyond transformers to include switchgears, STATCOM, HVDC, and control & automation products. While the data center market is growing (50-60% YoY), it is not yet a substantial part of the order book compared to the rapid growth in the TBCB transmission segment.

    06

    Cash Generation and Capital Deployment

    The company generated ₹1.9 billion in cash during Q4 and ₹8.3 billion for the full year FY25, leading to a significant increase in cash and cash equivalents to ₹10.5 billion. The Board has recommended a dividend of ₹5 per share, resulting in an outflow of approximately ₹130 crores. Surplus cash is also invested in a cash pool managed by the GEV Group, providing liquidity and earning interest, reflecting a balanced approach to capital deployment for growth and shareholder returns.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.