GE T&D India: Turning around at the right time

20 Sep 2023 , 11:46 AM

Analysts of IIFL Securities recently hosted the senior leadership team of GE T&D for investor interactions in Mumbai. Following are the key takeaways: 

• After a 5 year lull, domestic T&D market is showing strong signs of rebound — buoyed by acceleration in projects for renewable evacuation, increasing TBCB role in state & central transmission and higher spend on grid stability and automation.
• Supply-side corrections (from domestic players + restriction on Chinese OEMs), rebound in demand and cost headwinds witnessed in the recent past have brought price discipline and aided improvement in realisations.
• Strategy of bidding selectively for new orders (especially projects) with single focus on profitability over revenue & market share, is bearing fruits for GE T&D to come out of woods. Selective order booking (mix, terms of trade and margins), pickup in demand outlook and operating leverage will help OPMs improve from the current levels (~9%).
• Leadership in EHV transmission products and grid stability solutions with a strong boutique of next-gen technologies place GETD in a sweet spot. Further, opening up of export opportunities for HVDC products from global markets is a key long-term catalyst.
• Analysts of IIFL Securities expect FY25 PAT to recoup to FY19 levels of Rs2bn and grow 60% Cagr (FY24-26) from a lower base in FY24, led by volume rebound and OPM of 10-11% range. HVDC order win is a key re-rating trigger.