Company Update : Hitachi Energy Ltd By Motilal Oswal Financial Services Ltd
Margin beat offset by slight miss on revenue
* Hitachi Energy reported a largely in-line performance in 3QFY25, with a beat on EBITDA offset by a marginal miss on revenue and PAT.
* Revenue grew 27% YoY to INR16.2b (MOFSL est. INR17b), led by execution mix and improved operational efficiencies.
* EBITDA margin came in at 10.3%, higher than our expectation of 9.2%, driven by lower RM expenses. EBITDA at INR1.7b (MOFSL est. INR1.6b) grew 145% YoY on a low base.
* There was a notional forex gain of INR519m; excluding this, PAT came in at INR855m (+272% YoY), a tad below our estimate of INR887m.
* Order inflow surged to INR115.9b as the company bagged the KhavdaNagpur HVDC project in consortium with BHEL. Apart from this, it also won orders in the transmission, power quality, substations, transportation and data center segments. Excluding the large HVDC order, the share of exports improved to 40%, with orders from Australia, Indonesia, Canada, Croatia, Azerbaijan, etc. The share of services stood at 11%. The order book stood at INR189.9b, up 152% YoY.
* With improved customer collections and advances received from the HVDC project, the company has become debt free as of 3QFY25.
* The company remains optimistic about opportunities from the energy transition, transmission infra, energy storage and green hydrogen segments, given the projected growth of energy demand in India and the increasing adoption of renewables.
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