GE Vernova T&D India Ltd Q2 FY26 Earnings Analysis

- The company expects continued strong growth with a 39% year-on-year revenue increase already observed in Q1 FY '25-'26. - Export contribution to revenues is targeted at about 30% in the long term, with export backlog currently around 30% of total backlog. - Pipeline growth for non-HVDC orders is expected to be in the single digits, approximately 7-8% over last year. - The company sees potential to grow volumes by around 15% over the next 3 years, even without large HVDC orders. - Execution of backlog valued at about INR130 billion supports revenue visibility for the next 3 years. - Demand across domestic and export markets remains strong, supported by energy transition trends globally. - Capacity expansions and debottlenecking efforts are ongoing to support growing volumes and orders. - Pricing environment is stabilizing, aiding sustainable margin and revenue growth.

- The company demonstrated strong financial performance in Q1 FY '25-'26 with 40% revenue growth and significant EBITDA margin expansion (29.1%, up 1000 basis points from previous year). - Last year’s EBITDA was 19.1% (high end of mid- to high teens range); management aims to improve upon this in the current year. - Positive cash flow of INR 1.7 billion generated in Q1 with cash balance of INR 12.2 billion and zero debt supports growth. - Backlog of INR 130 billion gives revenue visibility for next 3 years; 30% expected from exports long term. - Export orders have grown to around 30% of backlog, supporting profitable growth. - Margin expansion expected to continue driven by volume, price realization, and productivity improvements. - Management confident of sustained earnings and operating margin improvement over the coming years with growth driven by both domestic and export markets including HVDC and non-HVDC projects.

- GE Vernova T&D India Limited has announced a capex of approximately INR 2.5 billion. - This includes INR 1.4 billion allocated for valves and controls for HVDC and STATCOM projects. - An additional INR 1.1 billion is planned as regular capex to debottleneck factory capacities. - The company continues to evaluate options for utilizing available cash of INR 8 billion for further strategic investments or capacity expansion. - Management regularly assesses the timing and scale of future capacity expansions based on demand. - No concrete new large-scale capex plans have been disclosed beyond the current announced investments; decisions will be communicated as made.

- No current indication of new fundraising through debt or equity was mentioned in the call. - The company reported a strong cash position with INR 12.2 billion cash and cash equivalents and no debt. - Management announced a planned capex of approximately INR 2.5 billion and a dividend payout of INR 1.3 billion. - They have about INR 8 billion of available cash beyond announced utilization plans and are evaluating options for its use. - Any decisions regarding capacity expansion or additional investments will be communicated when the timing is right. - Focus remains on using cash for a combination of shareholder returns and meaningful business investments without explicit mention of external fund raising.

- As of June 30, 2025, GE Vernova T&D India's order backlog stands at INR129.6 billion, up 2% quarter-on-quarter. - The backlog represents approximately 3 times the revenue of the previous year, providing visibility for the next 2-3 years. - About 30% of the backlog is from export orders. - Approximately 30-35 billion INR of the backlog is long-term with execution cycles of 3 to 5 years; the remaining INR95-100 billion has an execution timeline of 18 to 24 months. - Order inflows during Q1 FY 2025-26 were INR16.2 billion, a 57% year-over-year increase. - 14% of Q1 orders were from exports, with 86% domestic. - The company expects steady export growth and continues to focus on disciplined underwriting and selectivity in order booking.