Hitachi Energy India Limited

Hitachi Energy India reported a solid Q3 FY26 with order inflows reaching Rs. 2,477.6 crores, marking a 73% YoY growth (excluding a large HVDC order from the prior year) and an 11.7% QoQ increase. Revenues for the quarter stood at Rs. 2,168 crores, up 29.6% YoY and 13.2% QoQ. Profit Before Exceptional Items^📎 (PBT) surged by 118.4% YoY to Rs. 402 crores, translating to an 18.5% margin, while Operational EBITDA margin improved to 15.6% from 10.1% YoY, reflecting enhanced operational efficiency and favorable product mix.

The company achieved an all-time high order backlog of Rs. 29,872 crores, providing strong revenue visibility for future quarters. Management emphasized its focus on execution, with notable project commissions including a 130 kV, 33 kV substation in Bhutan and a 220 kV GIS substation for a data center in Pune. The Mumbai HVDC project's pre-commissioning tests are complete, with full commissioning expected within 2-3 weeks, and management confirmed no delays or penalties are anticipated.

Hitachi Energy is strategically positioned to capitalize on technology-led growth, particularly in AI data centers, advanced manufacturing, and renewables. While data center contribution is currently in the high single digits, it is expected to grow significantly. The company is also expanding its export footprint, with current bidding in the 29-30% range against a target of 25%, aiming for exports to constitute 25-30% of future revenues (excluding large HVDC projects).

To support future growth, Hitachi Energy is undertaking significant capacity expansion. The company has a planned CAPEX of Rs. 700+ crores for FY26, with an additional Rs. 700+ crores for FY27, although only Rs. 155 crores has been utilized so far in FY26 due to a sequential approach. Initiatives include expanding the traction transformer facility and establishing a high voltage product facility in Savli, Gujarat, which will also aid in further HVDC localization efforts.

The company continues its strong commitment to ESG, operating on 100% renewable electricity and being on track to achieve a 70% reduction in operational CO2 emissions by 2025-2026 compared to 2019 levels. Operational efficiency measures, including the migration to an independent IT system (SAP4 HANA) from ABB, have contributed to a reduction in other expenses and overall margin improvement.

Management noted a favorable macroeconomic environment with upward-trending growth indicators and stable inflation. The Union Budget's focus on public capital expenditure and AI data centers, along with recent trade agreements like the EU-India Free Trade Agreement and the US-India trade deal, are expected to create significant opportunities for Hitachi Energy by reducing tariffs and boosting supply chain integration in key sectors like offshore wind.