Hitachi Energy India Q1 FY27 earnings call

Hitachi Energy India Limited commenced FY27 on a robust note, reporting significant growth in both orders and revenues. The company secured new orders worth ₹5,096.5 crores in Q1 FY27. Excluding a large HVDC order from the prior year for comparable analysis, order intake grew 26.1% YoY and 39.7% QoQ. This strong performance was driven by key wins in transmission, renewable energy evacuation, and the burgeoning data center segment, contributing to a healthy order backlog of ₹32,222.1 crores, which reflects double-digit growth compared to Q1 FY26 and provides strong revenue visibility.

The company delivered strong revenue growth of 68.6% YoY, reaching ₹2,493.7 crores in Q1 FY27, primarily due to robust execution of its order backlog. Profitability also saw significant improvement, with operational EBITDA growing 135.0% YoY to ₹399.9 crores. Profit Before Tax (PBT) increased 120.2% YoY, resulting in a PBT margin of 15.6% and a PAT margin of 11.8%. However, the quarter also saw an unrealized foreign exchange loss of ₹36.37 crores, and a slight YoY contraction in gross margin attributed to product mix, though it improved QoQ.

Reinforcing its commitment to India's energy transition and the "Make in India" initiative, Hitachi Energy India began construction of its 20th manufacturing facility in Karjan, Vadodara, in June 2026. This new facility, designed as a fully digital and smart manufacturing unit, is targeted for commissioning by December 2028. This investment aims to expand the company's manufacturing footprint, strengthen local capabilities, and meet the growing demand for sustainable energy infrastructure in India and global markets. Increased depreciation in the quarter reflects ongoing capital expenditure towards capacity expansion.

The company is actively capitalizing on emerging growth opportunities, particularly in Battery Energy Storage Systems (BESS) and data centers. It secured its first BESS project (165 MW / 330 MWh in Andhra Pradesh) and multiple data center orders, including a significant 40 x 2500 kVA project in Hyderabad. For BESS, the current focus is on domestic market validation and localization, with a strategy to provide both PCS solutions and complete end-to-end grid integration solutions (excluding batteries). The data center market shows strong visibility, with a potential for 15 GW by 2030, contingent on government support.

Hitachi Energy India demonstrated strong project execution, including GIS projects for an iron ore processing plant and in Mumbai, as well as the 1,000 MW Kudus-Aarey HVDC transmission project. The company also highlighted its commitment to sustainability, achieving a 16% reduction in freshwater usage compared to 2019 and earning a Water Positive Index Certificate for its Halol facility. Gender diversity increased from 5.8% to over 10%, with a target for further 3-4 percentage points improvement by 2030, alongside maintaining a recordable injury frequency rate of 0.09 and zero integrity incidents.

The company acknowledges the evolving market dynamics, including the entry of new competitors like Chinese players in segments such as GIS and transformers. Management expressed confidence in its ability to compete effectively, provided there is a level playing field, and stated that increased competition is welcome to meet demand. They anticipate no material impact on their margin ambition. While some segments like railway projects experienced slower progress in Q1, this is viewed as temporary, with an expected pick-up in the second half of the year.