Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- GE Vernova T&D India Ltd (BOM:522275, Financial) reported a significant increase in order bookings, reaching 46.8 billion, up by 333% year-on-year.
- The company's order backlog reached an all-time high of 98.4 billion, providing strong revenue visibility for the coming years.
- Q2 revenues increased by 59% year-on-year to 11.1 billion, with a notable rise in profits.
- The company improved its cash and cash equivalent balance to 6.8 billion as of September 30, 2024, from 2.8 billion as of March 31, 2024.
- GE Vernova T&D India Ltd is actively working on enhancing the cybersecurity of India's power grid, which is crucial for reliable and secure power distribution.
Negative Points
- The company faces challenges in maintaining a consistent order intake due to varying delivery requirements and decision timelines.
- There is uncertainty regarding the finalization of HVDC projects, which are expected to be decided within the next three months.
- The company's gross margin improvement includes non-repetitive gains, which may not be sustainable in future quarters.
- There is a forex loss of approximately 55 million during the quarter, impacting other income.
- The company has a significant reliance on export orders, which accounted for 53% of the total orders in the quarter, exposing it to global market fluctuations.
Q & A Highlights
Q: How should we view the strong domestic ordering trend, and what areas are driving this growth?
A: The domestic market is strong, with significant orders from digital projects and grid control. We expect a sustainable order intake, though it depends on delivery requirements and other factors. We prefer to assess on a yearly basis due to variability in order timing. - Sandeep Zanzaria, CEO
Q: Can you provide an update on the HVDC projects and expected timelines?
A: We anticipate the finalization of the first two HVDC packages within the next three months. - Sandeep Zanzaria, CEO
Q: What is the reason behind the corporate deposit transactions, and how are they managed?
A: We have shareholder approval to lend up to 700 crores to related parties. This is within our borrowing limit and is managed to support operational needs. - Sushil Kumar, CFO
Q: With the increase in export orders, how does this affect your margins and future projections?
A: Export orders, which now constitute about 40% of our backlog, generally offer better margins. We aim to improve margins over last year's performance, though specific future profitability guidance is not provided. - Sushil Kumar, CFO
Q: What is the expected CapEx for transformer capacity expansion, and how does it relate to HVDC projects?
A: The planned CapEx for transformers, which supports both HVDC and AC markets, is between $5 to $10 million. This expansion is aligned with our strategic needs and does not require additional large CapEx for HVDC orders. - Sandeep Zanzaria, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
