Buy GE Vernova T&D Ltd for the Target Rs.3,350 By Emkay Global Financial Services Ltd
GVTD has won a contract for design and establishment of a 2,500MW, ± 500kV high voltage direct current (HVDC) VSC terminal station (2 x 1,250MW) for evacuation of renewable power from KPS 3 (Khavda) to South Olpad. While the order value has not been disclosed, we believe it is in the ~Rs75-80bn range, to be executed over the next 4-5 years. Recently, the company had reported another large order-win (worth Rs12.3bn) from PGCIL, for refurbishment of 2x 500MW HVDC Chandrapur back-to-back link between northern and southern India. Both orders, coupled with the existing strong order book of Rs131bn, further strengthens the company’s long-term revenue visibility. GVTD has also announced capex of ~Rs10bn—which is Rs8bn(fresh) + Rs2.5bn—citing large domestic and export opportunities. The company is well placed to benefit from the current energy transition drive due to its strong product portfolio and localization. We maintain BUY on GVTD with TP of Rs3,350 (55x Sep-27E EPS).
Strong order-wins further strengthen the long-term revenue visibility GVTD continued to witness strong order wins, worth Rs107.8bn, up 86% YoY in FY25, followed by Rs32bn worth of orders in 1HFY26, backed by benefits from the global energy transition drive. The two recent large order-wins (aforementioned) worth ~Rs92bn further strengthen the company’s long-term revenue visibility. The H1FY26 order-book stands at ~Rs131bn (~2.6x TTM revenue), with the private/central/state utilities mix at ~69%/29%/3%. Going forward, we believe the overall order pipeline remains strong and awarding is likely to pick up in the near term. On the exports front too, the pipeline remains robust. The management has signed an RPT worth Rs30bn, which would help the company win more export orders.
Announced capex of Rs10bn to alleviate capacity constraint With a strong order pipeline in both domestic and internal markets, the Board recently approved capex worth ~Rs8bn, in addition to the Rs2.4bn announced earlier this year. This would be focused on advanced grid technologies: 1) Vadodara facility (transformers/reactors; +50% capacity); 2) Hosur and Padappai (GIS/AIS; +25%); 3) Hosur: New manufacturing lines for Air Core Reactors and Bushings at the existing facility. The entire capex would be funded through internal accruals
View and valuation We maintain our broad estimates, as the South Olpad project was already factored into our FY26 order inflow assumptions of Rs170-175bn, including base orders. Looking ahead, the healthy order book mix and strong tender pipeline—highlighted by the nearterm Barmer-II to South Kalamb (LCC) opportunity—along with a steady base HVDC business and clear focus on margin improvement underpin our confidence on GVTD’s robust earnings growth trajectory. Incremental comfort also comes from improving export visibility, reinforcing our positive outlook.
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