GE T&D India Ltd. share price forecast

GE T&D India’s (GETD) operating profit margin came in at 7.1% – up 310bps sequentially and 330bps YoY. It is the company’s highest operating margin in past 16 quarters. Revenues grew 21% YoY and operating profit 127% YoY. Order inflow for the quarter stood at INR 11bn, up 67% YoY.

GE T&D India (GETD) reported a weak set of numbers for Q4FY23 with subdued revenue and net loss due to lower opening order backlog and reduced profitability as a result of increased cost of certain electronics and execution of low-margin orders.

GE T&D India’s (GETD) revenues declined 15% YoY to Rs7.8bn in Q3FY23 as lower orderbook led to muted execution. However, EBITDA jumped 57% YoY to Rs458mn as EBITDA margin expanded 270bps YoY, mainly led by 1,200bps YoY gross margin expansion.

GE T&D India’s (GETD) revenue declined 18% YoY to Rs7bn in Q2FY23 as weaker orderbook led to muted execution.

GE T&D India’s (GETD) revenue declined 7% YoY to Rs 5.9bn in Q1FY23 as the lower orderbook led to a muted execution.

Higher freight cost, forex loss (Rs60-70mn) and higher reimbursement expenses impacted EBITDA margin (0.2% in Q1FY22). GE T&D; (GETD) reported poor quarterly performance led by lower execution and higher expenses. Revenue was flat YoY at Rs6.4bn, due to closure of most of the factory for nine days due to pandemic. Despite increase in commodity price, gross margins expanded (32.3% in Q1FY22) due to better product mix with higher contribution of product business, though it is...

Delay in order finalization leads to 45% decline in OI, but healthy ordering visibility seen in both domestic and international markets. GE T&D; (GETD) reported strong quarterly performance led by stellar execution, cost rationalization measures and higher other income. Sales grew by 10% YoY as manufacturing and project sites were operating at full capacity. Order inflow decline 45% to Rs6.9bn owing to delay in order finalization. Order book stood decent at Rs49bn (excluding L1 Rs3bn)...

Net Borrowings stands at Rs3.3bn as on 3QFY20 compared to Rs4.3bn in 2QFY20 due to better collections and turnaround of inventory. GE T&D; reported weak set of numbers for 3QFY20 on the back of lower opening order backlog (HVDC nearing completion), weak fresh order inflows,...

YoY to Rs39 mn. Company reported net adjusted loss of Rs205 mn during the quarter against PAT of Rs396 mn in 2QFY19. Order inflow during 2QFY20/1HFY20 was down 5%/17% YoY. While many Green Energy Corridor (GEC) orders were tendered out during the quarter, most of them are under final negotiations and expected to be awarded in 2HFY20. The Bangladesh HVDC project has been put on hold in order to ascertain measures to further reduce the project cost. With ongoing liquidity crisis, company raised debt...

GE T&D; India Ltd's (GETD's) 1QFY20 revenue growth performance was Change in Estimates | Target | Reco weakest in last seventeen quarters. Revenue was down 37% YoY (-34% ExHVDC order) at Rs7.3 bn lead by lower opening order backlog, weak order...

Dragged by sub-par execution: 1QFY20 sales declined 37% YoY to INR7.3b, below our est. of INR11.9b. Execution during the quarter was hurt by declining HVDC sales, non-execution of stressed projects and postponement of a few project executions to 2QFY20 (from 1QFY20). This, along with operating de-leverage led to EBIDTA miss (-71% YoY to INR424m v/s our est....

GE T&D; India Ltd's (GETD) execution picked up in 4QFY19 with revenue up Change in Estimates | Target | Reco 10% YoY (Ex-HVDC, revenue grew 20% YoY). However, FY19 revenue fell 3%YoY (Ex-HVDC, up 9%YoY) due to 1) weak order inflow (down 4%YoY in...

20 February 2019 Sales declined 19% YoY to INR11.7b due to lower availability of HVDC orders for execution. Three of the four poles for the Champa Kurukshetra (CK) line are completed, and order backlog available for execution for the CK line stands at INR2b. Gross margin improved 670bp YoY to 33%, given reduced execution of the CK order (INR838m v/s INR3,607m in 3QFY19) where margins were lower. EBIDTA margin improved 450bp YoY to 9.6%, supported by a better revenue mix. Order intake increased 84% YoY to INR14.4b, given better order finalization from private and state/central utilities. Private constituted 50% of orders and the balance came from state and central utility orders. Ordering has been supported by the Saubhagya scheme-related state utility capex. Order backlog stands at INR64b, providing revenue visibility for the next 18 months.

20 November 2018 Sales grew 14% YoY to INR9.9b, led by execution of (a) transmission projects for PGCIL, CSPTCL and Surya Urja, (b) two air-insulated substation projects for CSPTCL and (c) R&D; facility for BARC. EBITDA grew 15% YoY to INR921m (in-line). PAT rose 8.3% YoY to INR515m, below our estimate of INR645m due to lower other income (INR238m v/s our estimate of INR400m) and a higher tax rate (36% v/s our estimate of 32%). EBIDTA margin came in flat YoY at 9.3% (in-line). Order intake increased by a muted 2% YoY to INR7.2b, given lower PGCIL ordering and non-finalization of TBCB orders. GETD expects ordering from state SEBs to remain strong; it is also targeting neighboring countries to grow the exports business. We maintain our visibility on orders (on account of muted capex from PGCIL in the near-to- medium term) adds an element of uncertainty over growth.

FY18, it declined by 32% yoy to Rs8bn in Q4FY18, as a substantial proportion of the execution scheduled for FY18 was completed by 9MFY18, especially in Q3FY18 (wherein revenue increased by 32% yoy). While the gross margin held steady at 31.2% (+54 bps yoy), the EBIDTAM shrank by 771bps yoy to 1.5% impacted by lower turnover. EBIDTA declined by 89% yoy to Rs119mn. Other income increased by 279% yoy to Rs670mn. PAT contracted by 40% yoy to Rs278mn. The relentless focus on project closures and collection of old dues (including retentions) enabled GETD to generate FCF of ~Rs8.8bn (~4XFY18 PAT). Cash surplus (net of borrowings) now stand at ~Rs4.3bn v/s borrowings...

margin profile. EBIDTA margin for the quarter stood at 9.3% (+510bp YoY). Adj. PAT stood at INR475m v/s INR205m in 2QFY17. EBIDTA margin expansion driven by execution of better-margin order and cost rationalization: EBIDTA stood at INR805m, as against profit of INR349m, with the margin expanding YoY to 9.3% from 4.2%, led by closure of a large order (Champa Kurukshetra phase I) with a better margin profile, and also cost-rationalization measures. Management guided for 7-8%...

Net Sales for the quarter stood at INR 12,092 Mn which was up by 41% Y-o-Y but remained flat at 1% Q-o-Q. Company's top-line growth was aided by faster execution (15.4% Order book to Sales vs. 11.3% of Q1 FY17 order book). Company in the last quarter successfully commissioned projects for Jindal Steel Works (400kvs Substation), Tamil Nadu Transmission (220kvs Substation) and PGCIL Agra, (400kv Transformer). EBIDTA stood at INR 1054Mn which improved substantially on back of lower COGS, which improved 300bps and lower employee expenses resulted in better than expected EBITDA and margins. Company's EBIDTA margin came in at 8.7% against our estimate of 8.9%. Company's PAT stood at INR 617Mn which grew by 33.7% Q-o-Q. PAT Margin stood at 3.9% and improved by 120bps Q-o-Q. Higher than expected...

Top takeaways from Q1FY17 : Alstom T&D’s (ATD) loss of Rs 176mn (vs Rs 102mn profit in 1Q16) was materially below our and consensus estimates of profit. Results were below estimates due to weak margins and high interest expenses.On reported basis losses were even higher at Rs 1.97bn on account of provisions for doubtful debts and tax disputes. These provisions were over and above IND?AS impact. In our view change in management (from Alstom to GE) led to these provisions. The pricing for power?transmission equipment, especially transformers and GIS, continues to remain under pressure due to intense competition from foreign manufacturers and further added by reverse auction process adopted by some utilities.Despite the weak market, order inflows grew 12% yoy to Rs 8bn led by government orders for transformers, reactors, GIS and AIS of 220?765kV range.

Outlook and valuation: ATD is still in the integration phase with GE, resulting in higher volatility in margins. Visibility on order inflows also remains low on weak T&D ordering in FY17?18 coupled with loss of opportunity in 765 KV GIS, HVDC and STATCOM orders. They cut their FY17/18 EPS estimate by 28/6% to factor in lower revenues and margins. Maintain Neutral rating with a revised target price of Rs 335 (earlier Rs 375). The stock currently trades at 43x FY18 EPS.