Buy GE Vernova T&D Ltd for the Target Rs.4,750 by Emkay Global Financial Services Ltd
We maintain our positive view on GE Vernova T&D India Ltd. Our constructive view is underpinned by:
1) Consistent operational performance and steady EBITDA margin expansion
2) Strong revenue and order inflow visibility, supported by a robust order book and healthy tender pipeline, aided by the global energy transition theme
3) Timely capacity expansion initiatives, including transformer capacity augmentation and indigenization, which are expected to enhance execution capabilities and improve operational efficiencies
4) A healthy revenue mix, with exports contributing 30–35% of total revenue, supporting sustained margin strength. For Q4FY26, the company reported strong performance, with revenue/EBITDA/PAT growth of 42%/98%/118% YoY. Order backlog stands at Rs215bn (3.5x TTM). We raise FY27E/28E EPS by 7.6%/7.2% and maintain BUY, with target price revised upward to Rs4,750 (from Rs3,900), valuing the stock at 60x FY28E earnings
Robust set of results
GVTD’s robust Q4FY26 performance reflects a strong demand environment, favorable mix with higher share of products, and sturdy exports (33% during the quarter). Revenue grew 42% YoY to Rs16.4bn, led by strong execution and a robust opening order book. EBITDA margin improved to 30.5%, led by 468bps YoY improvement in gross margin and operating leverage. Robust exports sales (typically with better margin) also led to improvement in profitability. EBITDA jumped 98% YoY to Rs5bn. Hence, given the strong operating performance, PAT grew 118% YoY to Rs4.1bn
Order book at a record high of Rs215bn (3.5x TTM revenue)
Q4FY26 order inflow came in at Rs86.1bn, up 188% YoY. This included Khavda-South Olpad HVDC order from Adani Group in the domestic market. Exports order inflow (adjusting for one large order in the base) was also healthy. We believe the overall pipeline remains strong, with awarding expected to see further pick-up in FY27. On the exports front, the pipeline also remains robust. The company recently signed RPT transaction sales/purchase agreements with its parent and other group entities worth US$151mn, further boosting exports. The order book stands strong at ~Rs215bn (3.5x TTM revenue), with the private/central/state utilities mix at 76%/22%/1.5%.
View & valuation – Maintain BUY
GVTD’s balance sheet remains healthy with net cash balance of Rs25bn, supported by CFO generation of Rs15.8bn during the year. A healthy order book mix, sturdy tender pipeline, and focus on margin improvement provide confidence in GVTD’s robust earnings growth trajectory. Higher export visibility further adds comfort to our positive view. Factoring in the strong Q4/FY26 results, we raise FY27E/28E EPS by 7.6%/7.2% and maintained BUY, with TP revised upward to Rs4,750 (from 3,900), at 60x FY28E.
For More Emkay Global Financial Services Ltd Disclaimer http://www.emkayglobal.com/Uploads/disclaimer.pdf & SEBI Registration number is INH000000354
