Earnings Call Transcript Analysis Report #
Financial Performance #
Key Financial Metrics (Q4 FY25) #
- Order Intake: Rs. 2,190.9 crores, up 56% YoY.
- Quote: “In the quarter under review, we achieved a 56% year-on-year order growth amounting to Rs.2,190.9 crores…”
- Revenue: Rs. 1,921.9 crores (total income), up 13.1% YoY.
- Quote: “Revenue is also up by 13% year-on-year to Rs.1,921 crores for the quarter…”
- Quote (Ajay Singh): “…revenue went by 13.1% Y-on-Y, it is Rs.1921.9 crores.”
- Profit Before Tax (PBT): Rs. 246.7 crores, up 62.1% YoY (12.8% of revenue).
- Quote: “…profit before tax and profit after tax were up by 62.1% year-on-year at Rs.246 crores…”
- Quote (Ajay Singh): “…our profit before tax increased by 62.1% Y-on-Y at Rs.246.7 crores… PBT to be 12.8%…”
- Profit After Tax (PAT): Rs. 183.9 crores, up 61.8% YoY (9.6% of revenue).
- Quote: “…and 61.8% year-on-year at Rs.183.9 crores, respectively.”
- Quote (Ajay Singh): “Profit after tax also increased by 61.8%, which stood at Rs.183.9 crores… PAT at 9.6%.”
- Operational EBITDA (Q4 FY25): Rs. 235.6 crores, 12.3% margin.
- Quote (Ajay Singh): “Operational EBITDA, if you see for the stand-alone quarter 4, it stood at Rs.235.6 crores, basically resulting in a double-digit operational EBITDA of 12.3%.”
- Material Cost (Q4 FY25): 61.6% of revenue.
- Personnel Expenses (Q4 FY25): 7.5% of revenue.
- Other Expenses (Q4 FY25): 16.6% of revenue.
Key Financial Metrics (Full Year FY24-25) #
- Order Intake: Rs. 18,173.8 crores, up 228% YoY.
- Quote: “For the full year, orders reached a record of Rs.18,173.8 crores, as you can see from the slide, up by 228%…”
- Revenue: Rs. 6,475.4 crores (presentation slide) / Rs. 6,442 crores (CFO comment), up 23% YoY / 22.3% YoY.
- Quote: “…while revenue stood at Rs.6,475.4 crores, up by 23%.”
- Quote (Ajay Singh): “…if you see our revenues stood at Rs.6,442 crores and roughly 22.3% growth compared to the last year.”
- Profit Before Tax (PBT): Up 133% YoY (8% of revenue, vs 4.2% last year).
- Quote: “Both PBT and PAT also significantly up by 133%…”
- Quote (Ajay Singh): “…profit before tax is 8% compared to last year 4.2%…”
- Profit After Tax (PAT): Up 133% YoY (6% of revenue, vs 3.1% last year).
- Quote (Ajay Singh): “…and PAT at 6% compared to 3.1%.”
- EBITDA Margin Improvement (FY24-25): Improved by 250 basis points YoY.
- Quote: “…our EBITDA margin has improved by 250 basis points compared to last year.”
- Order Backlog (as of March 31, 2025): Rs. 19,245.9 crores (highest ever).
- Quote: “…recorded highest ever order backlog of Rs.19,245 crores at the year-end, 31st March 2025.”
Revised Guidance or Forecasts #
- Management reiterated commitment to maintaining double-digit EBITDA margins on a yearly basis.
- Quote: “…our thing is that overall year-wise, we will maintain the double-digit EBITDA.”
Areas of Growth or Decline (Q4 FY25 Segment Orders YoY) #
- Growth: Transmission (+91%), Renewables (+386%), Railways & Metro (+24%).
- Quote: “The transmission segment saw a 91% growth surge, where the renewables saw year-on-year growth of 386% and railways & metro are up by 24% year-on-year.”
- Decline: Data Center (-56%), Industry (-33%). Management attributes this to seasonality and timing.
- Quote: “However, the data center and industry saw a year-on-year decline of 56% and 33% respectively. But we believe this is a seasonal decline and a timing factor.”
- Exports (FY24-25): Contributed almost 37% to total orders (excluding HVDC), up 77% YoY.
- Services (FY24-25): Contributed 7.4% to total orders, up almost 60% YoY.
Other Financial Highlights #
- QIP: Raised Rs. 2,520.82 crores. QIP expenses carved out from gross proceeds, not impacting operational profit.
- Quote: “QIP-related expenses are carved out separately, from gross QIP proceeds which will be paid separately. So that will not impact operational profit.”
- Debt: Company is debt-free.
- Quote: “As of now, we are not having any short-term borrowings at the company level… We are debt-free since last quarter.”
Strategic Initiatives & Business Updates #
Major Strategic Announcements #
- Qualified Institutional Placement (QIP): Successfully initiated and closed, raising Rs. 2,520.82 crores.
- Quote: “…we initiated and closed our first qualified institutional placement QIP, which I will discuss later.”
- “True One Hitachi” Vision: Aligning with parent company’s vision for more synergy and collaboration among group companies.
- Quote: “This aligns with our parent company, Hitachi’s vision of transforming the group into ‘True One Hitachi.’”
- New Service Business Unit: Launched from April 1st, 2025, as the 5th business unit.
- Quote: “…the company has introduced its service business unit that is the 5th business unit, from April 1st, 2025.”
- 75 Years in India: Celebrated during FY24-25.
New Products, Services, or Markets Discussed #
- First Made in India Variable Shunt Reactor: Tested, designed, and manufactured at the power transport factory.
- Quote: “Some of the notable orders include the first Made in India variable shunt reactor for the National Transmission Utility…”
- Quote: “We tested our first variable shunt reactor that was designed and manufactured at the power transport factory…”
- Service Level Agreement for Dry Type Transformers: First SLA signed with a large data center provider.
- Quote: “I’m also delighted to inform you that our service team has signed a first service level agreement with the world’s largest data center provider for dry type transformers of various ratings.”
Significant Operational Changes #
- Facility Expansions:
- Transformers, interrupters, and valves.
- Insulating materials.
- Bay extension for pressboard and insulation kit manufacturing at Mysore facility.
- Warehouse expansion at Power Quality factory in Doddaballapur, Bangalore.
- Quote: “We have multiple expansions at our various facilities, especially in transformers, interrupters and valves, also our insulating materials, etc.”
- Focus on Safety, Integrity, and Quality:
- 18% decline in safety incidents in FY24-25.
- Quote: “FY ‘24-‘25, we saw a decline of 18% of such incidents compared to last year.”
- Sustainability Initiatives:
- 6% reduction in total energy consumption per crore revenue.
- 4% reduction in freshwater usage (due to 10 rainwater recharge wells).
- 17% reduction in overall waste disposal.
- Added 1,240 kW rooftop solar, maintaining 100% fossil-free electricity across units.
Ongoing or Completed Projects #
- Commissioned Projects (Q4 FY25):
- 400 kV AIS substation for 500 MW solar project in Rajasthan.
- Two transmission projects: one for ISTS in Madhya Pradesh (220 kV, 33 kV, 132 kV substations), another in Bhutan (66 kV GIS, 33 kV GIS).
- 220 kV GIS project in Bangalore for a leading battery manufacturing company.
- HVDC Projects: One HVDC project booked in FY24-25. A second HVDC project (announced) will be booked in Q1 FY25-26. Execution period for these is 48-54 months.
- Quote: “The second HVDC project, which we announced will come in first quarter of FY25-26, because we have concluded the contracts in the first week of April 2025.”
- Quote: “So, these projects are a completion period of 48 and 54 months, 48 is a bipole-I, 54 months is a bipole-II.”
Market & Competitive Landscape #
Insights about Industry Trends #
- Energy Transition: Driving order growth, focus on modernizing the grid for clean electricity.
- Quote: “In the quarter under review, we achieved a 56% year-on-year order growth amounting to Rs.2,190.9 crores, led by energy transition…”
- Strong Growth in Energy Sector Expected to Continue: Supported by government commitment and investments.
- Quote: “While geopolitical uncertainty has posed some challenges, we expect the growth momentum in the energy sector to continue.”
- Government Investment: FY25-26 budget for energy sector increased to Rs. 26,550 crores (from Rs. 19,000 crores).
- Interstate Transmission System (ISTS): Expects close to Rs. 1 lakh crores investment over the next two financial years.
- Growth Drivers: Foreign direct investments, data center investments, modernization of Indian railways.
- Global Demand for T&D Equipment: Shortages globally.
- Quote (Question from Mahesh Bendre): “Sir, globally also there is a shortage of transmission and distribution equipment.”
Competitive Positioning Statements #
- Technology Leadership in HVDC: Company invented HVDC, significant global installations, agnostic of LCC/VSC technology.
- Quote: “When it comes to technology-wise, Hitachi Energy invented the HVDC technology 70 years back…we have close to 150 gigawatts worth of installations, both combined LCC and VSC technology. So, we are agnostic of technology.”
- Localization: Significant localization of technology and manufacturing (over 80% of global portfolio produced locally).
- Quote: “Today, not restricted to HVDC, but for all the portfolio put together, whatever we’re producing globally, more than 80% we produce locally here.”
- Data Centers: One out of three data centers powered by their grid integration solutions.
- Quote: “So one out of the three data centers today is powered through our grid integration solutions in that.”
Market Challenges or Opportunities Mentioned #
- Challenge: Reciprocal tariffs (need to monitor impact on exports).
- Quote: “…of course, we really have to wait and see how this will pan out to be. But it will impact various industries whenever it happens, but so we have to keep a constant vigil and devise a mechanism to minimize the same…”
- Opportunity: Energy transition, ISTS expansion, data centers, railways, energy storage.
- Opportunity in Services: Addressable market of Rs. 60,000 crores installed base, potential orders of Rs. 2,000 crores per year.
- Quote: “We said we have a potential of future addressable market is in the range of Rs.2,000 crores per year.”
Risk Factors & Challenges #
Concerns or Challenges Acknowledged by Management #
- Operational Complexity: Balancing operational complexity and efficiency.
- Quote: “At the onset of the fiscal year, our focus remained on balancing the operational complexity and efficiency…”
- Geopolitical Uncertainty: Poses some challenges, though energy