Summary
Hitachi Energy India Limited - Q3 FY26 Earnings Call Summary Thursday, February 05, 2026
Event Participants
Executives Ajay Singh (CFO), N Venu (MD & CEO), Poovanna Ammatanda (General Counsel & Company Secretary), Seema Siddiqui (Head of Communications and Government Relations)
Analysts Amit Anwani, Bhalchandra Vasant Shinde, Harshit Patel, Mohan Krishnaswami, Parikshit Kandpal, Shirom Kapur, Subhadip Mitra, Sumit Kishore, Umesh Raut
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Order Inflow | ₹2,477.6 crores | -78% YoY due to a high base (HVDC order last year); +73% YoY excluding HVDC; +11.7% QoQ. |
| Order Backlog | ₹29,872 crores | All-time high; provides strong revenue visibility for coming years. |
| Revenue | ₹2,168 crores | +29.6% YoY and +13.2% QoQ; driven by solid execution across utilities and industry segments. |
| Operational EBITDA | ₹338 crores | 15.6% margin; +550 bps YoY; reflects improved product mix and operational efficiencies. |
| PBT (Before Exceptional) | ₹402 crores | ₹402 crores (18.5% margin); +118.4% YoY; driven by export momentum and execution focus. |
| PBT (After Exceptional) | ₹347.8 crores | Includes a ₹54.2 crore impact (2.5%) related to the implementation of the new labor code. |
| PAT | ₹261 crores | 12.1% margin; +390 bps YoY improvement in profitability. |
| Export Revenue % | ~25-30% | Management target maintained at 25% but currently trending near 30% excluding large HVDC projects. |
Geographic & Segment Commentary
- Utility & Industry: These segments dominated the order mix this quarter, contributing 47% and 43% respectively. Notable executions included 765 kV reactors for solar/wind substations in Gujarat and Karnataka.
- Data Centers: Identified as a high-growth area with AI-ready centers requiring massive power flexibility. Hitachi commissioned a 220 kV GIS substation for a Pune data center and sees this as a multi-year growth lever.
- Exports: Strategy focused on global feeder factories and allocated markets. US-India trade deals and EU-India FTA are expected to further boost supply chain integration and cost-competitiveness.
Company-Specific & Strategic Commentary
- Capacity Expansion: Groundbreaking performed for a new high-voltage product facility in Savli, Gujarat, and expansion of traction transformer capacity for high-speed rail.
- Service & Digital: Created a separate Global BU for Services to act as a lifecycle partner for customers, focusing on recurring revenue and margin enhancement.
- Localization: Continued focus on localizing HVDC converter valves and transformers in India; management noted that 70% of the portfolio is protected by price escalation clauses.
- Sustainability: Achieved 100% renewable electricity operations and a 30% reduction in landfill disposal compared to FY25.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| CAPEX | ₹1,400+ crores for FY26-27 | ₹700 cr planned for FY26; though current utilization is ₹155 cr, a spike is expected in coming quarters. |
| Margin Profile | Double-digit margins | Management confirmed consistency in margin improvement, trending toward sustainable double digits. |
| Revenue Growth | Robust Momentum | Driven by the ₹29,872 cr backlog; no anticipated slowdown despite the completion of current HVDC manufacturing phases. |
Risks & Constraints
| Risk | Context |
|---|---|
| Labor Code Impact | The transition to the new labor code resulted in a one-time ₹54.2 crore exceptional hit to PBT this quarter. |
| Product Mix Volatility | Gross margins fluctuated slightly (to 39.5%) due to the mix of products executed versus high-margin services. |
| Global Supply Tightness | Global capacity is tied up through FY30-32; while India is expanding, global shortages could impact component sourcing. |
Q&A Highlights
HVDC Execution & Margins
- Question: What is the status of the Mumbai HVDC project and its impact on margins? (Umesh Raut)
- Answer: Pre-commissioning tests are complete, with commissioning expected in 2-3 weeks; gross margin fluctuations are purely due to product mix variations (N. Venu/Ajay Singh).
Market Competition & China
- Question: How does management view potential Chinese competition in the transformer space? (Parikshit Kandpal)
- Answer: There is no official government message, but the current policy restricts imports from land-border countries; Hitachi remains confident as long as there is a level playing field (N. Venu).
Data Center Potential
- Question: Is there an HVDC component in new data center orders? (Mohan Krishnaswami)
- Answer: AI-ready data centers require massive flexibility (100MW to 250MW shifts in seconds); Hitachi is looking at connecting data centers directly to HVDC or renewable sources (N. Venu).
Royalty Payments
- Question: How is royalty calculated on large HVDC projects? (Parikshit Kandpal)
- Answer: Royalty is paid for technology access, which allows for localization; inter-company imports are generally excluded from the calculation basis (Ajay Singh/N. Venu).
Key Takeaway
Hitachi Energy India delivered a strong Q3 FY26, characterized by a 29.6% YoY revenue growth and a significant expansion in operational EBITDA margins to 15.6%. Despite a high base effect impacting YoY order inflows, the order backlog reached an all-time high of ₹29,872 crores, providing multi-year visibility. Strategically, the company is pivoting toward high-growth “edge of the grid” segments, including AI-ready data centers, e-mobility, and high-speed rail, while simultaneously expanding its Savli and traction transformer capacities. Exports continue to trend ahead of the 25% target, benefiting from global supply shortages and favorable trade agreements. While a one-time labor code provision impacted net PBT, the underlying operational momentum remains robust. Management expects to sustain this growth trajectory through FY27, backed by aggressive Capex and a leadership position in the energy transition.
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