Accmulate GE Vernova T&D India Ltd For Target Rs.4,650 by Prabhudas Liladhar Capital Ltd
Strong Q4; growth momentum remains intact
We revise our FY27/28E EPS estimates upward by +3.7%/+4.8%, factoring in strong execution momentum and margin gains led by more favorable mix of export and highvalue services. GE Vernova T&D (GET&D) delivered a strong operational performance with revenue increased by 42%YoY and EBITDA margins expanded by 400bps aided by higher export contribution, improved services mix and gradual roll-off of low-priced legacy contracts. The company announced a ~Rs10bn capex program focused on HVDC localization, air-core reactors, disconnectors and circuit breakers, aimed at strengthening domestic manufacturing capabilities and increasing indigenous content across key transmission products. Domestic T&D ordering activity remains healthy with ~33 projects currently under bidding, while export visibility continues to improve supported by renewable integration and grid modernization opportunities globally. Management remain confident of securing INR70-80bn of base orders from the domestic market (excluding HVDC) and expects inflows to improve from export markets too, mainly from the US. The recently secured VSC HVDC order from Adani is expected to materially contribute from FY28 onwards, while management also highlighted a sizeable refurbishment opportunity pipeline for legacy LCC HVDC projects commissioned over the last two decades. Further, rising investments in hyperscale data centres globally, particularly in the US, along with gradual migration of domestic data-centre infrastructure towards higher-voltage 400kV/765kV networks, are expected to create incremental medium-term demand opportunities for transmission equipment
We believe
1) A healthy order pipeline in the power market
2) A robust order book (Rs212.3bn)
3) The management’s focus on margin improvement augur well for strong revenue & profit growth of GVTD. The stock is trading at a P/E of 75.0x/61.3x on FY27/28E. We roll forward to Mar’28E and downgrade our rating from ‘BUY’ to ‘Accumulate’ due to rally in stock price with a revised TP of Rs4,650 (Rs4,050 earlier) valuing the stock at a PE of 65x Mar’28E (65x Sep’27E earlier)
Stronger execution led to robust performance:
Revenue rose 42.8% YoY to Rs16.4bn (PLe: Rs17.6bn) driven by robust execution in the domestic business (+22.3% YoY to Rs10.9bn) and exports business (+109.0% YoY to Rs5.5bn). EBITDA grew by 66.6% to Rs4.4bn (PLe: Rs4.6bn). EBITDA margin increased by 400bps YoY to 27.2% led by gross margin (+468bps YoY) expansion. Adj.PAT grew by 76.0% to Rs3.5bn (PLe: Rs3.4bn) largely aided by better operating performance and lower effective tax rate (-223bps YoY to 25%).
Robust order book at Rs212.3bn (3.4x TTM revenue):
Q4FY26 order inflow came in at Rs86.1bn (inc. VSC HVDC Khavda South Olpad order from Adani) The FY26 order inflow came in at Rs147.8bn vs Rs107.8bn in FY25. Order book stands healthy at Rs212.3bn (3.4x TTM revenue) with a mix of Private/State Utilities/Central Utilities at ~76%/2%/22%.
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