Buy GE Vernova T&D India Ltd for the Target Rs 5,300 by Emkay Global Financial Services Ltd
GVTD has emerged as an L1 bidder for the Barmer II–South Kalamb HVDC line. The project value is expected to be ~Rs250bn, with the HVDC portion worth ~Rs70-80bn. Once the order finalizes in favor of GVTD, the order backlog will scale up to a substantial ~Rs280bn, providing revenue visibility of 4.2x its TTM revenue. GVTD is well positioned to capitalize on structural growth in the power transmission sector, supported by strong prospects across both domestic and export businesses. This is underpinned by
1) ~Rs10bn capacity expansion planned through to FY28 which should enhance its ability to cater to the growing demand;
2) strong support from parent (GE) providing consistent access to new technologies and enabling faster localization for the Indian market;
3) robust balance sheet, with net cash position of Rs29.3bn as of 1QFY27-end and a healthy 3-year cash-flow generation at ~Rs10bnpa on average; and
4) favorable working-capital dynamics, with NWC maintained at ~50 days over the last 3 years. We believe these factors will help the company deliver earnings CAGR of 25% over FY26-29E. We maintain BUY on GVTD and TP of Rs5,300 (60x Sep-28E EPS).
GVTD declared as L1 for the Barmer II–South Kalamb HVDC project
GVTD has emerged as the L1 bidder for the 6,000MW, ±800kV HVDC LCC Terminal Station, for evacuation of renewable power from Barmer II to South Kalamb. The overall project worth is estimated at ~Rs250bn, with the HVDC portion accounting for ~Rs70– 80bn. Subject to the company bagging the order, its order backlog is expected to scale up materially to ~Rs280bn, implying strong revenue visibility of ~4.2x TTM revenue. Notably, the Barmer II–South Kalamb project would be GVTD’s second HVDC order, following its first HVDC win for the Khavda–South Olpad project in Dec-26. We expect both HVDC projects to contribute substantially to revenue, FY29E onward.
In-place infrastructure to execute strong order backlog; order pipeline looks impressive
GVTD plans to invest >Rs10bn through to FY28 toward new manufacturing lines for HVDC LCC/VSC-STATCOM valves, transformers, and accessories, along with an engineering and testing lab. The company also expects a ~Rs13bn data center-related order from its US group entity in 2HFY27; this is likely to support growth in exports. Further, we believe US restrictions on Chinese power equipment imports could accelerate supply-chain diversification, positioning GVTD favorably for upcoming transmission opportunities.
View and valuation
GVTD’s strong net cash position of Rs29.3bn as of 1QFY27, supported by healthy operating cash-flow generation, provides flexibility to fund planned capex, support incremental working capital requirements, and pursue further growth opportunities. We retain BUY and maintain TP of Rs5,300, valuing the stock at 60x PER (Sep-28E).
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