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PAT boosted by better-than-expected other income

* Hitachi’s revenue for 4QFY25 was 19% lower than our estimates as execution remained weak during the quarter. However, with a betterthan-expected EBITDA margin of 14.4% and higher other income, reported PAT came in 7% ahead of our estimates.

* Revenue grew 11% YoY to INR18.8b (vs. our estimate of INR23.4b), led by execution mix and improved operational efficiencies.

* EBITDA margin at 14.4% was 330bp above our expectation of 11.1%, driven by lower-than-expected other expenses. EBITDA at INR2.7b (vs. our estimate of INR2.6b) grew 49% YoY even on a high base. EBITDA margin improvement on a YoY basis was driven largely by gross margin improvement and better absorption of employee costs.

* Higher other income and better revenue mix boosted reported PAT by 62% YoY, reaching INR1.8b. Excluding the exceptional items, PAT came in at INR1.9b (+74% YoY), 15% above our estimate of INR1.7b. Other income spiked, also due to higher cash balances from QIP proceeds.

* Order inflows for the quarter surged 56% YoY to INR21.9b. Transmission & renewables led the charge, with an increasing focus on modernizing the grid to ensure a reliable supply of green electricity across India.

* As of March 31, 2025, the order backlog stood at INR192.5b, providing revenue visibility for the coming quarters.

* For FY25, orders reached a record INR181.7b (including HVDC orders), up 228% YoY, while revenue/EBITDA/Adj PAT stood at INR63.8b/5.96b/3.5b, increasing 22%/71%/111% YoY.

* The Board of Directors recommended a final dividend of INR6/share of face value INR2 each.

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