ge power india ltd share price Management discussions

The IMFs latest World Economic Outlook, released in April 20231, presents a sobering picture of global GDP growth. It projects a decline from 3.4% in 2022 to 2.8% in 2023, followed by a modest recovery to 3% in 2024. Similarly, the OECD and the UN have also lowered their GDP growth forecasts for 2023 due to inflationary pressures and the lingering effects of the US banking crisis. The OECD predicts 2.6% global growth for 20232, while the UN expects a more modest 1.9%3. In contrast, the World Banks January 20234 update paints the most pessimistic outlook, with a projection of 1.7% global growth for 2023. This places current global growth at one of the slowest paces in nearly three decades, trailing only the recessions of 2009 and 2020.


Amidst a global slowdown, India is one of the very few countries that have grown stronger than anticipated and is likely to outperform the global markets next year too. With domestic consumption growth and strong private capital investment supporting the manufacturing, the overall outlook for the country remains positive. According to Deloittes April 2023 projection, India will likely grow at a moderate pace of 6.0%-6.5% in FY 2023-24 with pick up in investments kickstarting the virtuous circle of job creation, income, productivity, demand, and exports supported by favourable demographics in the medium term.5

The World Banks recent India Development Update forecasts a growth rate of 6.3% for the fiscal year 2023-24, slightly lower than the December projection of 6.6%. Despite this marginal adjustment, the Indian economy continues to demonstrate resilience in the face of external challenges6. Strong domestic consumption growth serves as a driving force, while private-sector spending is expected to improve, benefiting from India Inc.s enhanced balance sheet in recent years. Additionally, the banking sector experiences a positive asset quality cycle, driven by corporate deleveraging, complementing the revival of the services sector.


Despite the global energy crisis triggered by Russias invasion of Ukraine, world electricity demand showcased remarkable resilience throughout 2022. Surging by nearly 2%, it remained a formidable force, albeit slightly below the average growth rate of 2.4% witnessed during the 2015-2019 period. The electrification wave continued its acceleration across the transportation and heating sectors worldwide, with a record-breaking number of electric vehicles and heat pumps sold, fuelling the demand for electricity.

Nevertheless, economies striving to recover from the far-reaching impacts of the Covid-19 pandemic were met with a severe blow in the form of exorbitant energy prices. The relentless surge in prices for crucial energy commodities, including natural gas and coal, inflicted a sharp escalation in power generation costs, subsequently contributing to an alarming surge in inflation, creating a challenging landscape for energy consumption.7

According to a report by Grid-India, power generation in India witnessed its fastest growth in over three decades during FY2022-23. The analysis of daily load data revealed a notable 11.5% increase, reaching a total of 1,591.11 billion kilowatt-hours (kWh) by the end of March 2023. This surge represents the most significant upswing since March 1990. However, despite this growth, there was still a shortfall of 6.69 billion kWh in meeting the demand, representing the largest deficit in six years.8 The projected growth rate for the period of 2023-2025 is slightly slower, averaging around 5.6% per year.

Fossil fuel-based plants played a significant role in this growth, experiencing an 11.2% rise in output, marking their quickest expansion in more than 30 years. The analysis further highlighted a remarkable 12.4% surge specifically in coal-based electricity production, effectively offsetting a substantial 28.7% decline in generation from gas-fired plants. The drop in gas-fired generation was primarily attributed to the global spike in liquefied natural gas (LNG) prices, discouraging its utilization. Electricity generated from coal rose to 1,162.91 billion kWh, the data showed, with its share in overall output rising to 73.1% - the highest level since the year ending March 2019. Notably, hydropower generation exceeded the average of the 2017-2021 period by over 10%, despite the record heatwave in 2022.

Indias installed capacity reached 410 GW by the end of 2022, with 236 GW coming from fossil-fired power plants (coal, gas, and oil), 52 GW from hydro plants, 115 GW from renewable energy sources like solar PV and wind, and the remaining capacity from nuclear power plants. However, the retirement of coal power plants faced delays, with around 14 GW of originally planned closures between 2017 and 2022 still operational for balancing purposes.

Although there was an increase in coal stocks, higher electricity consumption led to a 10% price rise in the second half of 2022 compared to the same period in 2021, with an average wholesale price of H 5,000/MWh. The strong growth in solar PV installations played a crucial role in meeting peak loads driven by increased refrigeration and space cooling demands9.

During the year, India recorded historic growth in its coal output at 892.21 million tonnes (Mt), 14.65% higher than the 778.21 Mt produced in the 2021-22 fiscal.


Indias coal and power sector is on the cusp of transformative changes in the coming years, as the country plans to halt the construction of new coal- fired power plants, with exceptions for those already in progress10. While awaiting government approval, the final draft of the National Electrical Policy (NEP) represents a crucial milestone in Indias ambitious journey toward achieving net-zero emissions by 2070. Presently, coal accounts for approximately half of Indias electricity generation. Alongside the drive for cleaner and sustainable energy sources, the increasing costs associated with new coal power plants have also played a role, rising from Rs 7.85 crore per MW in 2020-21 to Rs 8.34 crore per MW.

A recent report by the Central Electricity Authority (CEA) on ‘Optimal Generation Mix for 2020-3011 paints a slightly different picture, though. This report has considered 26.9 GW of additional coal-fired power capacity including 6,920 MW of capacity that is currently under bidding, and also identifies an additional 9,420 MW of capacity for development in the future. This outlook is not in line with the latest NEP draft, and the next months will show how much additional coal power generation the government will actually consider. According to Global Energy Monitor (GEM), 32 GW of coal-powered capacity is currently being built in India. Once completed, that would boost current operating capacity by close to 14% and lift total Indian coal capacity to beyond 266,000 MW, GEM data shows12.

The draft report from Niti Aayog indicates that the anticipated coal demand will fall within the range of 1,192 million tonnes to 1,325 million tonnes by 2030. At the same time, India strives to reduce dependence on coal imports. To increase the percentage of coal requirement that can be met with domestic production, a strategic plan has been devised to elevate Indias overall coal production to 1 billion tonnes by 2023-24, with a specific objective for Coal India Limited to achieve this milestone by 2024-2513.

In 2023, Indias power sector is set to undergo a transformative shift towards a lower carbon mix, while addressing a growing demand. The country is committed to achieving its climate targets and playing an active role in global efforts towards net-zero emissions. To drive the

transition, several measures have been introduced. The National Green Hydrogen Mission, for instance, aims to produce 5 million metric tonnes of green hydrogen annually by 2030, supported by substantial investment. Incentives are also in place to boost the manufacturing of clean energy equipment like solar modules and electrolysers, reducing reliance on fossil fuel imports and advancing the nations energy transition.

Indias vast solar energy potential will be optimally harnessed through installations in remote areas, effectively reducing the carbon footprint. A vital role in unlocking the full potential of renewable energy sources will have to be played by innovative battery energy storage systems, one of the governments initiatives to foster 24/7 lower carbon power generation14. And the commitment to green growth extends beyond renewable energy generation. Further initiatives include the scrapping of old vehicles, establishing compressed biogas plants, and promoting environmentally friendly and cost-effective modes of transportation such as coastal shipping.

Indias power sector outlook in 2023 reflects a dedication to a lower carbon energy transition, positioning the country as an advocate and practitioner of sustainable practices. This transformative journey will contribute significantly to global efforts in decarbonising the energy sector and building a more sustainable future.

According to the International Energy Agency (IEA), nuclear output is projected to increase by over 80% during the forecast period, reaching 83 TWh, but it will remain a relatively small component, comprising 4% of the mix by 2025. The IEA further projects that by 2025, total coal-fired generation is expected to increase, even though its share in the overall generation mix is anticipated to decline to 69% as renewables gain ground, reaching a 25% share, including Hydro.

With focus on adding more renewable energy to the mix, the Indian power sector presents huge opportunity in solar, wind and hydro power generation. Even though in recent years most of the additional power generation capacity has come from solar and wind, there is a significant opportunity for hydroelectric power in the countrys energy landscape. To meet the growing demand for flexible resources and support the integration of 500 GW of renewable energy into the grid, the National Electricity Plan 2022 highlights the need for an additional 17 GW of hydro capacity between 2022 and 2031. The expansion of hydro capacity in India not only supports the ambitious renewable energy targets but also presents opportunities for sustainable development.

Though the Governments focus is on growing power generation from renewable sources, coal-based power generation will remain the major source of electricity in India at least for the next decade. This would provide ample opportunities to your Company in terms of services and upgrades to thermal power plants. While the government is planning to stop tendering new coal-based power plants15, the existing power plants and the ones currently under construction will require services and upgrades.

Also, your Companys capability to provide upgrade services ensures it sustains the growth trajectory. With Indias energy transition in full swing and a growing number of fluctuating renewable sources entering the grid, coal power producers may have to adopt new operating models to assist in grid balancing. To meet the requirements of enhanced flexibility and quicker response times, additional investments in technology might be necessary. This presents GEPIL with a promising opportunity as we are offering solutions that enable faster ramp times, low load operations, and improved reliability despite the additional stress that this flexibility puts on the equipment.

In addition, despite the recently announced 24-months delay of the implementation of flu gas desulphurisation systems (FGD), these systems will have to be installed at some point to ensure emissions reductions as per modern norms. Once this mandatory regulation is in place, the FGD market will offer great opportunities for your Company.

Your Company is working to capitalise on the opportunities provided by Indias energy transition, both for the hydro sector and for existing coal power plants, as we have the technology, capabilities, expertise and experience to serve as a true partner to customers as they navigate the energy transition.



The summarized performance is as under:-

(J in million)
Year ended 31 March 2023 Year ended 31 March 2022

Orders received

16,350 7,648


17,958 26,204

Orders in hand

36,153 37,761

Risks and Threats

The extended deadline by the Government for installation of Flue-Gas Desulphurisation (FGD) units in coal-powered plants has severely impacted the order flow for the players involved in providing FGDs, including your Company. Changing regulations and evolving environmental policies can introduce uncertainties for power plant operators. Frequent policy revisions or unclear compliance requirements can create challenges in implementing FGD technologies effectively and efficiently. Close collaboration between regulatory authorities and power plant operators is crucial to address these uncertainties and ensure continuous compliance.

Apart from regulatory factors, the sector faces risks from the supply chain side. The past years have shown how quickly incidents like geopolitical tensions, or a pandemic can disrupt availability of commodities, key components and raw materials. Procuring necessary materials on a consistent basis is crucial, for both power producers and technology and service providers, which may require reducing dependence on single source suppliers.

Another threat to the sector are volatile coal prices in the international market. Despite high coal reserves and the Governments plans to maximize the use of domestic coal, India still imports a major chunk of its coal requirement to meet the burgeoning demand. In the last few years, coal price and availability on the international market have been quite volatile, sometimes impacting the full load operation of thermal power plants. Power producers in such cases have often resorted to running at lower capacity utilisation, leading to uncertain operation models and grid supply.

Also, capacity and expertise limitations can pose challenges, especially for smaller and older power plants. The availability of skilled personnel for operation, service and maintenance may be limited. Training programs and capacity-building initiatives can help address this limitation and ensure the successful operations of power plants and the implementation of upgrades and new technologies, including FGD systems.

To mitigate these risks, a comprehensive approach is required, including thorough technology evaluation, supply chain management, proper operation and maintenance planning, supportive policy frameworks, and capacitybuilding programs. By addressing these risks proactively, India can successfully navigate the challenges associated with the energy transition and achieve its environmental goals.

With reference to the earlier announcement by GE to exit new build coal, to reduce its stake in the Company and depromoterize there is no further update on the matter.

For more details on the risks involved, please refer response to question no. 24 (Overview of the entitys material responsible business conduct issues) under Section A : General Disclosure section of Business Responsibility and Sustainability Report of your Company for FY 2022-23 forming part of this Report.


One of the key requirements of the Companies Act, 2013 is that companies should have adequate Internal Financial Controls (IFC) and that such controls should operate effectively.

Internal Financial Controls means the policies and procedures adopted by the Company for ensuring orderly and efficient conduct of its business, including adherence to Companys policies, safeguarding of its assets, prevention and detection offrauds and errors, accuracy and completeness ofthe accounting records, and timely preparation of reliable financial information.

Your Company process of assessment ensures that not only does adequate control exist, but it can be evidenced by unambiguous documentation. The process involves scoping and planning to identify and map significant accounts and processes based on materiality. Thereafter risk is identified and their associated controls are mapped. These controls are tested to assess operating effectiveness.

The auditor performs independent testing of controls. The Auditors Report is required to comment on whether the Company has adequate IFC system in place and such controls are operating effectively.

Your Companys Internal Control System is robust and well established. It includes documented rules and guidelines for conducting business. The environment and controls are periodically monitored through procedures/processes set by the management, covering critical and important areas. These controls are periodically reviewed and updated to reflect the changes in the business and environment.

Management reviews actual performance of the business on a regular basis. In all about 96 key controls across the organisations units were identified to be tested on a systematic basis. Design gaps and weaknesses were identified to particular business and to specific process owners and followed through methodically for closure.

In line with the internal audit program, internal audit of eight processes/ areas was done. The implementation of audit recommendations was followed through on a monitored and time bound plan.

The audit committee met six (6) times during the year. The committee reviewed the adequacy and results of the testing of Internal Financial Controls and Internal Audit actions.


S. No. Particulars

FY 2022-23 FY 2021-22 Variance

Reason for variance

i Debtors Turnover

0.8 1.1 (30%)

Due to decrease in revenue

ii Inventory Turnover (Raw Material)

16.7 15.0 12%


iii Interest Coverage Ratio

(11.3) (7.5) 50%

Primarily due to impact on profit in the current business scenario

iv Current Ratio

1.0 1.2 (13%)


v Debt Equity Ratio

1.3 0.4 198%

Reduction in shareholder equity due to losses during the year including exceptional items

vi Operating Profit Margin (%)

(15.2) (7.8) 95%

Primarily due to impact on profit in the current business scenario

vii Net Profit Margin (%) (before tax)

(24.7) (11.1) 122%

Primarily due to impact on profit in the current business scenario

viii Return on net worth (%)

(196.8) (43.4) 354%

Primarily due to impact on profit in the current business scenario


Industrial Relations

At your Companys Durgapur factory, we realigned its manufacturing capacity in accordance with its future business plans, resulting in the reduction of 240 contract workmen in November 2022. The entire process was carried out with a high level of trust between the management and the union. As a result, there were no adverse industrial relations issues reported. The factory ensured strict statutory labour compliance, and during routine audits by the authority no instances of non-compliance were observed. Various employee and family engagement initiatives were conducted during the year including Republic Day, Independence Day, Holi, Vishwakarma Puja and Durga Puja in the company township.

COVID-19 challenges and opportunities

The COVID-19 pandemic continued to be at the top of the list of worlds worries throughout 2022-23. Your Company continued with a hybrid workplace strategy, giving employees a choice to work with flexible and safe options. As per the government guidelines, your Company issued some relaxation in the COVID norms at its Noida office. Some of the services/facilities were restored after the country witnessed a drop in COVID-19 cases. The cafeteria facility was made operational with packed food, as well as a tuck shop with a variety of food options. Health being the top priority for your Company, the gymnasium facility was also made operational while maintaining regular sanitation and COVID guidelines. Employee engagement initiatives were resumed after a long gap.

Capability Development

Capability development is a key focus area, aiming at growing and developing our employees, as well as building and keeping capabilities and skillsets required to deliver on our strategy and commitments to customers even in times of comparatively high attrition rates. With this objective, your Company has taken various actions, such as:

? Providing continuous learning opportunities through technical and non-technical trainings, and bubble assignments. Employees are coached by the SMEs and their People Leaders to help them grow within the organization.

? Continuing the internship program that inducts fresh talent into the organization and provides on-the-go learning opportunities to the interns. Your Company offered internships to 28 students across various management and engineering colleges. You Company has also onboarded six interns from the previous batch.

? Delivering extensive coaching and training to equip people leaders in keeping their teams engaged and drive performance


A big part of your Companys HR efforts is strengthening an inclusive and performance driven organisational culture:

Talent Management:

Talent has always been a focal point of your Company. In order to keep

our talent engaged and therefore support the business to achieve its

Operating Plan 2023, your Company has rolled out a couple of initiatives:

? Regular employee connects to understand the level of motivation that will keep the talent engaged and motivated at the workplace

? 1-on-1 conversations with senior leadership team

? Unique value-proposition plans

? HR has taken initiatives to analyse talent loss and its causes, and built a robust attrition action plan to address this issue

? Standard Work for Leaders and HR Partners has been rolled out to support continuity and strengthen the above initiatives


Your Company saw employee attrition of 14.39% as of December 2022, continuing in the first quarter (calendar year) of 2023 at 14.40% as of March 2023. This attrition rate is a concern for your Company and we have put several counter measures in place to ensure higher employee retention, so that crucial domain expertise could be retained within the business.

? A strong People, Performance and Growth (PPG) cycle to identify high potential, high retention risk and high loss impact employees. Efforts are made to keep these talents engaged and motivated.

? The Inclusion & Diversity (I&D) council continued to organize activities to increase awareness and involvement of employees in the I&D initiatives of the company.

? Your Company, through its engagement with the GE Womens Network, carried out many activities to empower, energize and elevate women to ensure equity.

? Your Company places special emphasis on employees health. It has done many activities throughout the year to create awareness as well as educate employees on the importance of maintaining a good health and how they can do it.

? Various initiatives were done for site employees which include Compliance Refresher, IT Refresher, Session on PF, Virtual Health Awareness Session, Health Talks etc. at different project sites.


The Indian Power Sector is going through a paradigm shift as the Government accelerates the transition to clean energy to put the economy on a trajectory to net-zero by 2070. The recovery from the pandemic has been strong vis-a-vis other major economies with domestic consumption growth and private investment guiding the growth of this 1.4 bln people economy. In alignment with the target of achieving 500 GW of non-fossil capacity by 2030, as stated in the updated Nationally Determined Contributions, the government of India is actively implementing measures to accelerate the deployment of renewable energy capacity. A comprehensive plan has been established to facilitate the integration of this additional capacity into the transmission grid. This plan encompasses grid expansions and the creation of additional storage capacity to ensure a seamless and efficient integration of fluctuating renewable energy sources.

In order to achieve decarbonisation, promote digitalisation, and encourage decentralisation, the power sector will need to undergo significant technological upgrades. For coal power producers, operating models may change, which can bring business opportunities for your Company as we are offering solutions for higher flexibility and faster response to grid fluctuations. As Indias energy transition will touch all sources, including gas, coal and hydro, your Company is well positioned as a partner to customers through the transition to a


This report contains forward-looking statements, which may be identified by their use of words like plans, anticipate, believe, estimate, expect, intend, will, ‘projects or other words of

For and on behalf of the Board of Directors

Mahesh Shrikrishna Palashikar

Place: Noida

Chairman & Non-Executive Directors

Date: 26 May 2023

(DIN: 02275903)

similar expressions as they relate to the Company or its business. All statements that address expectations or projections about the future, including, but not limited to statements about the Companys strategy for growth, development, market position, expenditures, and financial results are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company undertakes no obligations to publicly update or revise forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such statements. Therefore, as a matter of caution, undue reliance on the forward-looking statements should not be made as they speak only of their dates. The above discussion and analysis should be read in conjunction with the Companys financial statements included herein and the notes thereto.