Q1 2027 Hitachi Energy India Ltd Earnings Call

August 7, 2026

Speaker #1: Good evening, ladies and gentlemen. You are connected to the Hitachi Energy India Limited conference call. Please stay connected. This conference will begin shortly. We thank you for your patience.

Operator 2: Good evening, ladies and gentlemen. You are connected to the Hitachi Energy India Limited conference call. Please stay connected. This conference will begin shortly. We thank you for your patience. Participants, good evening. You are connected to the Hitachi Energy India Limited conference call. Please stay connected. This conference will begin shortly. We thank you for your patience. Ladies and gentlemen, good day and welcome to Hitachi Energy India Limited Q1 FY27 analyst conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note this conference is being recorded. I now hand the conference over to Miss Priyanka Bhagat, Head, Investor Relations, Hitachi Energy India Limited.

Speaker #1: Participants, good evening. You are connected to the Hitachi Energy India Limited conference call. Please stay connected. This conference will begin shortly. We thank you for your patience.

Speaker #1: Ladies and gentlemen, good day and welcome to the Hitachi Energy India Limited Q1 FY27 analyst conference call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Operator: Ladies and gentlemen, good day and welcome to Hitachi Energy India Limited Q1 FY27 analyst conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note this conference is being recorded. I now hand the conference over to Miss Priyanka Bhagat, Head, Investor Relations, Hitachi Energy India Limited.

Speaker #1: Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note, this conference is being recorded.

Speaker #1: I now hand the conference over to Ms. Priyanka Bhagat, Head Investor Relations Hitachi Energy India Limited. Thank you, and over to you, ma'am.

Operator 2: Thank you, over to you, ma'am.

Operator: Thank you, over to you, ma'am.

Speaker #2: Good evening, everyone. Thank you for joining us today for the Q1 financial year 27 earnings conference call of Hitachi Energy India Limited. We appreciate your continued interest in our company and value the opportunity to engage with you as we discuss a performance for the quarter.

Priyanka Bhagat: Good evening, everyone. Thank you for joining us today for the Q1 FY27 earnings conference call of Hitachi Energy India Limited. We appreciate your continued interest in our company and value the opportunity to engage with you as we discuss our performance for the quarter. Before we begin, I would like to remind everyone that certain statements made during this call may constitute forward-looking statements. These statements are based on current expectations and subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. With that, it is my pleasure to invite Mr. N. Venu, Managing Director and CEO of Hitachi Energy India Limited, to share his insights. Over to you, sir.

Speaker #2: Before we begin, I would like to remind everyone that certain statements made during this call may constitute forward-looking statements. These statements are based on current expectations and subject to risk and uncertainty that could cause actual results to defer materially from those expressed or implied.

Speaker #2: With that, it is my pleasure to invite Mr. N. Venu, Managing Director and CEO of Hitachi Energy India Limited, to share his insights. Over to you, sir.

Speaker #3: Thank you, Priyanka. Good evening, everyone, and thank you very much for joining Hitachi Energy India's Q1 FY27 earnings conference call. We have just announced our Q1 FY27 results, and I hope all of you got the opportunity to go through the same.

N. Venu: Thank you, Priyanka. Good evening, everyone. Thank you very much for joining Hitachi Energy India's Q1 FY27 earnings conference call. We have just announced our Q1 FY27 results, and I hope all of you got the opportunity to go through the same. Over the next 20, 25 minutes, I will walk you through our performance for the period ending 30 June 2026. As always, you may follow the presentation through the webcast or download it from the stock exchange. For ease of reference, I will refer the slide numbers. Today in this room, I'm joined by our CFO, Ajay Singh, and Poovanna Ammatanda, the General Counsel and Company Secretary of Hitachi Energy India. I'm pleased to share that we have started the FY22 on a very strong note, delivering a very robust growth in our orders and revenues.

Speaker #3: So, over the next 20 to 25 minutes, I will walk you through our performance for the period ending June 30, 2026. As always, you may follow the presentation through the webcast or download it from the stock exchange for ease of reference.

Speaker #3: I will refer the slide numbers today in this room. I'm joined by our CFO, Ajay Singh, and Poona Amatanda, the General Counsel and Company Secretary of Hitachi Energy India.

Speaker #3: I'm pleased to share that we have started the financial year 27 on a very strong note delivering a very robust growth in our orders and revenues.

Speaker #3: Our Q1 FY27 performance reflects our continued focus on operational excellence and the execution of our project, executing our order backlog in a disciplined way, enabling us to effectively convert our strong order backlog into revenue. With our commitment to strengthening execution capabilities and building a more resilient supply chain, we began constructing Hitachi Energy’s 20th manufacturing facility in Gurjan, Vadodara, in June 2026.

N. Venu: Our Q1 FY27 performance reflects our continued focus on operational excellence and execution of the project, our order backlog in a disciplined way, enabling us to effectively convert our strong order backlog into revenue growth. As part of our commitment to strengthen execution capabilities and building a more resilient supply chain, we began constructing our Hitachi Energy's 20th manufacturing facility in Karjan, Vadodara in June 2026. This investment reinforces our commitment to India's energy transition, energy security, and the government's vision of Make in India. Despite the geopolitical challenges that the country continues to deal with, the underlying fundamentals of our business remain exceptionally strong. India continues to witness unprecedented investment in transmission infrastructure, renewable energy integration, renewable energy deployment, grid modernization and resilience, and urbanization and digital infrastructure. The long-term structural drivers continue to create a significant and sustainable growth opportunities for our industry.

Speaker #3: This investment reinforces our commitment to India's energy transition, energy security, and the government's vision of Make in India. So, despite geopolitical challenges that the country continues to deal with, the underlying fundamentals of our business remain exceptionally strong.

Speaker #3: India continues to witness unprecedented investment in transmission infrastructure, renewable energy integration, renewable energy deployment, grid modernization, and resilience and urbanization and digital infrastructure. The long-term structural drivers continue to create a significant and sustainable growth opportunity for our industry.

Speaker #3: Our strong order backlog combined with a healthy bidding pipeline provides good visibility for future revenue growth. More importantly, we remain focused on execution, discipline, profitable growth, and delivering value to all of our stakeholders.

N. Venu: Our strong order backlog, combined with a healthy bidding pipeline, provides good visibility for future revenue growth. More importantly, we remain focused on execution, discipline, profitable growth, and delivering value to all of our stakeholders, supporting the country in its energy security aspirations. With that note, let me now take you through the presentation, and I'm now moving to slide number three. Our license to operate. Safety, which is our license to operate. As you all know, safety remains fundamental to our license to operate. We continue to embed best-in-class safety practices across our factories, project sites, offices. During the quarter, we conducted more than 450 life-saving rules inspections, more than 800 safety observation tools, enabling us to close all high-risk observed identified during the period. In parallel, we continue to implement health and safety programs and training initiatives across our facilities to further strengthen our safety culture.

Speaker #3: Supporting the country in its energy security aspirations. With that note, let me now take you through the presentation, and I am now moving to slide number three.

Speaker #3: Our license to operate safety, which is our license to operate. As you all know, safety remains fundamental to our license to operate. We continue to embed best-in-class safety practices across our factories, project sites, and offices. During the quarter, we conducted more than 450 Life-Saving Rules inspections and more than 800 Safety Observation Tools, enabling us to close all high-risk observations identified during the period.

Speaker #3: In parallel, we continue to implement health and safety programs and training initiatives across our facilities to further strengthen our safety culture. Through these efforts, we remain focused on achieving a recordable injury frequency rate of 0.09.

N. Venu: These efforts will remain focused on achieving a recordable injury frequency rate of 0.09. Moving to the slide number four, which is very important to us, the ESG targets and action plan. Sustainability remains central to our strategy with a strong focus on decarbonizing our operations. As reflected in the table, we expect to achieve most of our 2030 sustainability targets by end of this financial year, with the exception of our water and diversity goals, which will go up to a year or more so, but much before our 2030 stated targets. During the year, we achieved a 16% reduction in fresh water usage compared to the 2019 baseline through recycling initiatives and the deployment of water-efficient fixtures. We are confident that achieving our 2030 water target remains well within reach.

Speaker #3: So, moving to slide number four, which is very, very important for us—the ESG targets and action plan. Sustainability remains central to our strategy.

Speaker #3: With a strong focus on decarbonizing our operations as reflected in the table, we expect to achieve most of our 2030 sustainable targets by the end of the this financial year, with the exception of our water and diversity goals, which will go up to, you know, a year or more.

Speaker #3: So, much before our 2030 stated targets, during the year we achieved a 16% reduction in freshwater usage compared with the 2019 baseline through recycling initiatives and the deployment of water-efficient fixtures.

Speaker #3: We are confident that achieving our 2030 water target remains well within reach. Notably, our halal facility received the water-positive index certificate last quarter, underscoring our commitment to responsible water stewardship.

N. Venu: Notably, our Halol facility earned the Water Positive Index certificate last quarter, underscoring our commitment to responsible water stewardship. We also made meaningful progress in governance and social impact. Our gender diversity is moved to 10%, reinforcing our commitment to building a more inclusive workplace. We are targeting further improvement of three to four percentage points by 2030. At the same time, we continue to uphold an uncompromising commitment to integrity, with zero incidents recorded during the year. Our sustainability progress is closely aligned with the broader energy transition and India's commitment at COP26. I move to slide number five. India's electricity demand is expected to grow strongly over the coming years and also coming decades. In parallel, the power grid is becoming increasingly complex, with high load densities, rising reliability requirements, and emerging demand drivers such as AI-enabled workloads, AI-enabled data centers.

Speaker #3: We also made meaningful progress in governance and social impact. Our gender diversity has moved to 10%, reinforcing our commitment to building a more inclusive workplace. We are targeting further improvement of three to four percentage points by 2030.

Speaker #3: At the same time, we continue to uphold an uncompromising commitment to integrity with a zero incident recorded during the year. Our sustainability progress is closely aligned with the broader energy transition and India's commitment as COP26.

Speaker #3: I move to slide number five. India's electricity demand is expected to grow strongly over the coming years and the coming decade. In parallel, the power grid is becoming increasingly complex, with high load density rising, reliability requirements increasing, and emerging demand drivers such as AI-enabled workloads and AI-enabled data centers. This is resulting in significant investments across transmission, distribution, consumption, and broader grid infrastructure.

N. Venu: This is resulting in significant investments across transmission, distribution, and consumption, also broader grid infrastructure. Our addressable market continues to present significant opportunities, and we see a strong momentum in renewable energy, transmission investments to integrate non-fossil fuel capacity, increasing investment in data centers, and accelerating adoption of electrical vehicles, to just name a few. Overall, these trends reinforce our confidence in multi-year growth opportunity for our portfolio, whether it is the product, systems, services, and software. As Hitachi Energy, we are closely at the forefront of India's energy transition. We recognize the responsibility that comes with this role and remain committed to enabling a more reliable, resilient, and sustainable energy future through our execution excellence, technology leadership, and strategic investment in capacity and capabilities. I move to slide number six.

Speaker #3: Our addressable market continues to present significant opportunities, and we see strong momentum in renewable energy transmission investments to integrate non-fossil fuel capacity, increasing investments in data centers, and accelerating adoption of electric vehicles, to just name a few.

Speaker #3: Overall, these trends reinforce our confidence in the multi-year growth opportunity for our portfolio, whether it's product systems, services, or software—as has Hitachi Energy.

Speaker #3: We are proud to be at the forefront of India's energy transition. We recognize the responsibility that comes with this role and remain committed to enabling a more reliable, resilient, and sustainable energy future through our execution excellence, technology leadership, and strategic investment in capacity and capabilities.

Speaker #3: I move to slide number six. As you can see, our performance against this backdrop, we secured orders worth 5,096.5 crores during the quarter Q1, and Q1 last year Q1 included a large HVDC order, you know, therefore to provide a more meaningful comparison of our underlying performance we have also presented our growth excluding HVDC for the current quarter on a comparable basis order intake in Q1 increased by 26.51% on a year-on basis and 39% on a quarter-on-quarter.

N. Venu: Q1 last year, Q1 included a large HVDC order you know. Therefore, to provide a more meaningful comparison of our underlying performance, we have also presented our growth excluding HVDC for the current quarter. On a comparable basis, order intake in Q1 increased by 36.1% on a year-on-year basis and 39% on a quarter-on-quarter. This growth was driven by several notable wins across key sectors. Among these, I would like to significantly highlight Hitachi Energy India's first battery energy storage system project, a 2 gigawatt wind power evacuation project in Europe, part of the 2 gigawatt wind power evacuation project, and supply of GIS GIL solutions for 100 gigawatt solar park in western India. In addition, we secured multiple data center orders from hyperscalers during the quarter. A notable project among this is 42.5 MW data center project in Hyderabad, awarded by a leading Indian multinational conglomerate.

Speaker #3: This growth was driven by several notable wins across key sectors among these I would like to significantly highlight Hitachi Energy India's first battery energy storage system project a two-gigawatt wind power evacuation project in Europe part of the two-gigawatt wind power evacuation project.

Speaker #3: And supply of GIS GAV solutions for a 100-gigawatt solar park investment in India. In addition, we secured multiple data center orders from a hyperscaler during the quarter. A notable project among these is a 40 x 2.5 MVA data center project in Hyderabad, awarded by a leading Indian multinational conglomerate.

Speaker #3: As a result, we closed the quarter with an order backlog of 32,222.1 crores representing strong highest order backlog highest order backlog ever and also strong double-digit growth compared to the Q1 of 2026 providing a revenue visibility for the coming quarters.

N. Venu: As a result, we closed the quarter with an order backlog of INR 32,222.1 crore, representing strong highest order backlog ever also strong double-digit growth compared to Q1 FY26, providing a revenue visibility for the coming quarters. We won several projects in the renewable sector, in industries, data center I have already talked about, also exports. If I move to slide number seven. The first order, the key orders wins during this year. The first order supports the acceleration of Europe's grid expansion, a landmark initiative comprising several projects that will enable the transmission of clean power. As part of this program, Hitachi Energy India will collaborate on three key transmission links. These three links will deliver 6 gigawatt of clean electricity to the grid, and we will be supplying also both products as well as services partly to our customers.

Speaker #3: We won several projects in the renewable sector, in industries, and in data centers, which I already talked about, and also in exports. If I move to slide number seven, the first orders are the key order wins during this year.

Speaker #3: The first order supports the acceleration of Europe's grid expansion and landmark initiative comprising several projects that will enable the transmission of clean power as part of this program Hitachi Energy India will collaborate on a three key transmission links and these three links will deliver six gigawatt of clean electricity to the grid and we will be supplying and and also both the both products as well as the services partly to to our customers.

Speaker #3: The second project marks a major milestone for Hitachi Energy in India. It’s a 165-megawatt, 330-megawatt-hour battery energy storage system project in AP, reflecting a strong validation of our capabilities in grid integration, power quality, and advanced energy solutions.

N. Venu: The second project marks a major milestone for Hitachi Energy in India. It is a 165 MW, 330 MWh battery energy storage system project win in Andhra Pradesh, reflecting a strong validation of our capabilities in grid integration, power quality, and advanced energy solutions. If you recall our Investors Day in Mumbai, we talked about entering into the new segments. Battery energy storage is one such segment where we are very successfully securing the first order in the quarter ended just now. The third project is a significant data center related order for a load cooling station and main cooling station comprising of 56 bays of 40 kV GIS and 12.5 over 12 of past that. The project will support 100 GW of solar park in Western India, highlighting our expertise in delivering large-scale transmission infrastructure for renewable energy integration and emerging grid infrastructures in MAC.

Speaker #3: If you recall our Investors Day in Mumbai, we talked about entering into new segments. Battery energy storage is one such segment where we were very successful in securing the first order in the quarter that just ended.

Speaker #3: The third project is a significant data center related order for a load pooling station and main pooling station comprising a 56 bays of point KV GIS and 12.5 kilowatt of bus that and the project will support 100 gigawatt of solar park invest in India highlighting our expertise in delivering large-scale transmission infrastructure for renewable energy integration and emerging digital infrastructure demand.

Speaker #3: And if I go to the next slide, we will discuss the projects that we executed during the quarter. As a technology leader, we remain committed to enhancing grid reliability through our timely execution and high-quality project delivery.

N. Venu: If I go to the next slide, we will discuss the projects, what we have executed during the quarter. As a technology leader, we remain committed to enhancing grid reliability through our timely execution and high-quality project delivery. During the quarter, we achieved significant progress in several strategic projects. I would like to highlight a few notable milestones. The gas insulated substation project for an iron ore processing plant in Chhattisgarh, the second one is 220 kV CCR base aligned with auxiliary systems at Dhamra, Joda, Odisha, and the 220 kV GIS project in Mumbai, Maharashtra. The last one you know very well, this is a 1,000 MW Kudus Aarey HVDC transmission project in Mumbai in Maharashtra. These projects underscore our strong execution capabilities across diverse industry segments and geographies.

Speaker #3: During the quarter, we achieved significant progress in several strategic projects. I would like to highlight a few notable milestones: the gas-insulated substation project for an iron ore processing plant in Chhattisgarh.

Speaker #3: And the second one is 220 KV CCR base along with accelerate systems at Damanjodi, Odisha. And the 220 KV GIS project in Mumbai, Maharashtra and the last one you know very well this is a 1,000 megawatt Kudus RA HVDC transmission project in Mumbai in Maharashtra.

Speaker #3: These projects underscore our strong execution capabilities across diverse industry segments and geographies. Our comprehensive scope of work spans the entire project life cycle, including design, engineering, manufacturing, supply, erection, testing, and end-to-end commissioning.

N. Venu: Our comprehensive scope of work spans the entire project life cycle, including design, engineering, manufacturing, supply, erection, testing, and end-to-end commissioning. This integrated approach enables us to deliver high-quality, reliable solutions while addressing the evolving needs of our customers and supporting the modernization of the power grid. Beyond project delivery, we continue to invest in capability building, innovation, and industry leadership to support long-term growth, which we are going to discuss in the next slide. I move to slide number nine. The energy sector, you all know, is at the forefront of the ongoing transformation of the global economy and especially also in Indian economy, making it imperative for Hitachi Energy to continuously adapt to this evolving landscape. Engagement at industry forums, conferences, and knowledge sharing platforms provide valuable insights and fresh perspectives, keeping us ahead of emerging trends and accelerate the execution of our strategic priorities.

Speaker #3: This integrated approach enables us to deliver high-quality, reliable solutions while addressing the evolving needs of our customers and supporting the modernization of the power grid.

Speaker #3: Beyond project delivery, we continue to invest in capability building, innovation, and industry leadership to support long-term growth, which we're going to discuss in the next slide.

Speaker #3: Slide number I move to slide number nine. The energy sector you all know is at the forefront of the ongoing transformation of the global economy and especially also in Indian economy making it imperative for Hitachi Energy to continuously adapt to this evolving landscape.

Speaker #3: The engagement that industry forums, conferences, and knowledge sharing platforms provide valuable insights and fresh perspectives, keeping us ahead of emerging trends and accelerating the execution of our strategic priorities.

Speaker #3: During this quarter we actively contributed to talent development innovation and industry thought leadership through several key initiatives. Some of them are Hitachi Energy the tech center in our Baroda trained several executives from Bhutan green power corporations and the next one is in a partnership with NIT Warangal Hitachi Energy hosted InnoTong 3.0 bringing together more than 100 participants across 28 teams to develop AI/ML powered digital twin solutions for the energy sector.

N. Venu: During this quarter, we actively contributed to talent development, innovation, and industry thought leadership through several key initiatives. Some of them are Hitachi Energy, the tech center in our Vadodara trained several executives from Bhutan Green Power Corporation. The next one is in a partnership with NIT Warangal, Hitachi Energy hosted InnoCom 3.0, bringing together more than 100 participants across 28 teams to develop AI/ML-powered digital twin solutions for the energy sector. The third one is at ELECRAMA plug-up, Hitachi Energy joined industry leaders to discuss India's growing global influence and opportunities emerging from its accelerating energy transition, smart grid expansions, and manufacturing growth. These initiatives reflect our commitment to building industry capabilities, fostering innovation, and strengthening our leadership position in shaping a more sustainable, resilient, and digitally enabled energy future. I move to slide number ten. Give a little bit more color on our order growth.

Speaker #3: And the third one is at Electromos Plaza Hitachi Energy join industry leaders to discuss India's growing global influence and opportunities emerging from its accelerating energy transition smart grid expansions and manufacturing growth.

Speaker #3: These initiatives reflect our commitment to building industry capabilities fostering innovation and strengthening our leadership position in shaping a more sustainable resilient and digitally enabled energy future.

Speaker #3: I move to slide number 10. To give you a little bit more color on our order growth—our order growth in the domestic market during the quarter was driven by strong momentum across industries, data center, and the renewables segments.

N. Venu: Our order growth in the domestic market during the quarter was driven by strong momentum across industries, data centers, and the renewable segments. The chart on the right highlights the order mix. From a business segment perspective, product orders emerged as the largest contribution in Q1 FY27. From an end market perspective, the order book remained well diversified with contribution broadly distributed across sectors. Looking at our customer channels, the quarter witnessed strong contributions from DPC, contractors, and OEM customers, reflecting the breadth of our market presence and strength of our customer relationships. Overall, the order intake demonstrates continued demand for our technology portfolio. Moving to slide 11. To further strengthen our execution capabilities, we began constructing Hitachi Energy India's 20th manufacturing facility in Karjan, Vadodara in June 2026. This investment underscores our commitment to supporting India's energy transition, enhancing energy security, and advancing government Make in India initiative.

Speaker #3: The chart on the right highlights order mix from a business segment perspective product orders emerged as the largest contribution in Q1 FY27 from an end market perspective the orders would remain well diversified with contribution broadly distributed across sectors.

Speaker #3: Looking at our customer channel the quarter witnessed strong contributions from EPC contractors and OEM customers. Reflecting the breadth of our market presence and strength of our customer relationship.

Speaker #3: Overall the order intake demonstrates continued demand for our technology portfolio. Moving to the slide 11 to further strengthen our execution capabilities we began constructing Hitachi Energy India's 20th manufacturing facility in Kirjan Vadodara in June 2026.

Speaker #3: This investment underscores our commitment to supporting India's energy transition enhancing energy security and advancing government make in India initiative. The new facility is being designed as a fully digital and smart manufacturing unit leveraging advanced technologies to enhance quality productivity and operational performance.

N. Venu: The new facility is being designed as a fully digital and smart manufacturing unit, leveraging advanced technologies to enhance quality, productivity, and operational performance. With a targeted commissioning date of the last quarter of the calendar year 2028, the facility will play a key role in expanding our manufacturing footprint, centering local capacities, and supporting the growing demand for sustainable energy infrastructure in India and global markets. Overall, our strong order intake, healthy backlog, successful execution, and continued investment in future capacity position us well for a sustained growth. With that, I will hand over to Ajay to take you through the next two slides. Over to you, Ajay.

Speaker #3: With a targeted commissioning date of this the last last quarter of the fiscal year 20 calendar year 2028 the facility will play a key role in expanding our manufacturing footprint centering local capabilities and supporting the growing demand for sustainable energy infrastructure in India and global markets.

Speaker #3: Overall our strong order intake helped the backlog successful execution and continued investment in future capacity position us well for a sustained growth. So with that I will hand over to Ajay to take you through the next two slides.

Speaker #3: Over to you, Ajay. Thank you, Venu, and good evening, everyone. So, let me take you through the quarter one results. If you see orders, we clocked ₹5,096 crore, and if I compare quarter on quarter, we have grown by 110%. But just to compare, without HVDC—if you remove that—then we see we have grown year on year by 26% and quarter on quarter by 39%.

Ajay Singh: Thank you, Venu. Good evening, everyone. Let me take you through the financial performance little bit in details of Q1. If you see orders, we have clicked INR 5,096 crores. If I compare from quarter-on-quarter, we have grown by 110%. Just to compare without HVDC, if you remove, then we see we have grown Y-on-Y 26% and quarter-on-quarter 39%. This gives a more robust growth in this particular quarter. The revenue from operations, we clicked INR 2,493 crores, and we have grown by 68% from Y-on-Y basis. That also supported in growth of the Profit Before Tax. Profit Before Tax, if you see, we have grown by 120%, INR 389.5 crores, that is 15.6%. If you compare Y-on-Y basis, we are 12%. Profit After Tax is 11.8%, which earlier it was 8.9%.

Speaker #3: So this gives a more robust growth in this particular quarter. Revenue from operations we clicked 2,493 crores and we have grown by 68% from YNY basis and that also supported in growth of the profit before tax so profit before tax if you see we have grown by 120% 389.5 crores that is 15.6% if you compare YNY basis we were 12 12%.

Speaker #3: Profit after tax we is 11.8% which was earlier it was 8.9% and if you see operation EBITDA we were 399 crores which is 16% compared to what we did in the YNY basis 11.5%.

Ajay Singh: If you see operation EBITDA, we are INR 399 crores, which is 16% compared to what we did in the Y-on-Y basis, 11.5%. It is important to note that this EBITDA performance includes an unrealized foreign exchange loss of INR 36.37 crores, which is recorded in this quarter. If I come to the next slide, I'll give you more details. You see we have a revenue for operations INR 2,493 crores. We had other income of roughly INR 57 crores, which includes the interest income that we have through our deposits that we have kept. Margins, Gross Margins is fairly consistent, I would say 40% for this particular quarter. Personnel Expenses around 6.5%. Other Expenses 17%, if you compare from Y-on-Y basis, which was earlier 23.5%. Exchange loss is INR 60 crores, which is basically notional in nature. Depreciation has increased compared to the previous quarter.

Speaker #3: So it is important to note that this EBITDA performance includes an unrealized foreign exchange loss of 36.37 crores which is recorded in this quarter.

Speaker #3: If I come to the next slide—a little bit, you know, giving more details—you see we have a revenue for operations in Q4 '93, and we had other income of roughly ₹57 crore, which includes the interest income that we have through our deposits that we have kept.

Speaker #3: Gross margins are fairly consistent, also at 40% for this particular quarter. Personnel expenses are around 6.5%, and other expenses are 17%, which you can compare on a year-on-year basis to the earlier 23.5%.

Speaker #3: Exchange loss is 60 crores which is basically notional in nature and depreciation is increased compared to the previous quarter and basically we are doing capex around our you know for the capacity expansion.

Ajay Singh: Basically, we are doing CapEx around for the capacity expansion. Finance cost remains consistent, and that is how if you see overall profit before tax is 15.6%, and profit after tax is 11.8%. Over to you, Renu.

Speaker #3: Finance cost remains consistent and that is how if you see overall profit before before tax is 15.6% and profit after tax is 11.8%. Over to you Renu.

Speaker #2: Thank you Ajay and ladies and gentlemen our Q1 FY27 demonstrates the strength of our strong go-to-market strategy our business model and the effectiveness of our execution strategy.

N. Venu: Thank you, Ajay. Ladies and gentlemen, our Q1 FY27 demonstrates the strength of our strong go-to-market strategy, our business model, and the effectiveness of our execution strategy. We delivered strong growth in orders, revenue, and profitability while continuing to invest for the future through capacity expansion, technology, leadership, and talent development. Our record order backlog and healthy bidding pipeline provide strong visibility for growth, and we remain focused on translating these opportunities into disciplined execution and sustainable value creation. Our focus remains on strengthening our core business, the core in utilities, our renewables, HVDC, industries, and infrastructure, while ensuring the continuity and resilience of our installed base through the service business. At the same time, we remain committed to effectively executing our strong backlog, enhancing productivity, and maintaining the highest standards of quality and customer satisfaction.

Speaker #2: We delivered strong growth in orders revenue and profitability while continuing to invest for the future through capacity expansion technology leadership and talent development. Our record order backlog and healthy bidding pipeline provides strong visibility for growth and we remain focused on translating these opportunities into disciplined execution and sustainable value creation.

Speaker #2: Our focus remains on strengthening our core business the core in utilities our renewables HVDC industries infrastructure while ensuring the continuity and resilience of our install base process service business.

Speaker #2: At the same time, we remain committed to effectively executing our strong backlog, enhancing productivity, and maintaining the highest standards of quality and customer satisfaction.

Speaker #2: We are also well positioned to capitalize on emerging growth opportunities particularly in the battery energy storage system renewable integration data centers grid modernization where demand fundamentals remain highly encouraging.

N. Venu: We are also well-positioned to capitalize on emerging growth opportunities, particularly in the battery energy storage system, renewable integration, data centers, grid modernization, where demand fundamentals remain highly encouraging. Looking ahead, we'll continue to invest in our people, technology, manufacturing capacity, and operational capabilities to support long-term sustainable growth. Backed by strong market fundamentals, a robust order pipeline, and our differentiated technology portfolio, we remain confident in our ability to create long-term value for all our stakeholders while contributing to more resilient, secure, and sustainable energy future. Thank you very much for listening to me, and now we open the floor for question and answers. Thank you very much.

Speaker #2: Looking ahead, we'll continue to invest in our people, technology, manufacturing capacity, and operational capabilities to support long-term sustainable growth. Backed by strong market fundamentals, a robust order pipeline, and our differentiated technology portfolio, we remain confident in our ability to create long-term value for all of our stakeholders while contributing to a more resilient, secure, and sustainable energy future.

Speaker #2: So, thank you very much for listening to me, and now we open the floor for questions and answers. Thank you very much.

Speaker #1: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone.

Operator 2: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Participants viewing the webcast may click on the Ask a Question tab on your screens. Our first question comes from the line of Amit Anwani with PL Capital. Please go ahead.

Operator: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Participants viewing the webcast may click on the Ask a Question tab on your screens. Our first question comes from the line of Amit Anwani with PL Capital. Please go ahead.

Speaker #1: If you wish to remove yourself from the question queue you may press star and two. Participants are requested to please use handsets while asking a question.

Speaker #1: Participants viewing the webcast may click on the ask a question tab on your screens. Our first question comes from the line of Amit Anvani with PL Capital.

Speaker #1: Please go ahead.

Amit Anwani: Hi. Thank you for the opportunity, and congrats for the very strong set of numbers. First question pertains to the 2 gigawatt tenant order in Europe. What's the quantum of that order, which is there in your INR 5,000 crore book order inflow? Second, are we expecting more orders as we understand there's a joint venture for at least four or five orders with L&T globally by Hitachi Energy. Are we expecting more such orders in the coming time?

Speaker #4: Hi sir thank you for the opportunity and congrats for the very strong set of numbers. First question pertains to the 2 gigawatt tenant order in Europe.

Speaker #4: So, what's the quantum of that order which is there in your Rs 5,000 crore book order inflow? And second, are we expecting more orders, as we understand there's a joint venture for at least four or five orders with L&T globally by Hitachi Energy?

Speaker #4: So, are we expecting more such orders in the coming time?

Speaker #2: Yes. So right now at this point in time it is a it is a combination of a three orders okay and we do look more of a services and also you know supporting from here and it's all three orders put together is around approximately around 1,700 crores.

N. Venu: Right now, at this point in time, it is a combination of three orders, as we do look more of services and also supporting from here, all three orders put together is approximately around INR 1,700 crores.

Speaker #4: Understood. And yeah and second I wanted to understand you highlighted about battery energy storage on the strong pipeline side battery energy storage and data center.

Amit Anwani: Understood. Second, I wanted to understand, you highlighted about battery energy storage on the strong pipeline side, battery energy storage and data centers. On battery energy storage, wanted to understand, will you be primarily focusing on the domestic market for BESS as of now, or there's an export opportunity? Second, where do we stand in terms of BESS? Probably, are we expecting orders this year? If you can highlight more on the BESS side.

Speaker #4: So, on battery energy storage, I wanted to understand: will you be primarily focusing on the domestic market for DSS as of now, or is there an export opportunity? And second, where do we stand in terms of DSS—are we expecting orders this year? If you can, please highlight more on the DSS side.

Speaker #2: As you know very well, for domestic battery energy storage, we have quite strong and robust requirements. And there is also, you know, a mandate that every renewable energy project needs to have mandatory energy storage.

N. Venu: As you know very well, the domestic battery energy storage, we have quite strong, robust requirements. There is also mandated that every renewable energy needs to have a mandatory energy storage. All those things are driving the huge amount of growth opportunities domestic. Right now, our focus is to supply for the domestic market. The domestic market itself is a huge requirement. We have just started, we will be doing, as you know, there's a new technology. We have to first ensure that this technology is deployed, then we will scale it up slowly after that. The pipeline is quite robust.

Speaker #2: So, all those things are driving a huge amount of growth opportunities domestically, and right now our focus is to, you know, supply for the domestic market.

Speaker #2: The domestic market itself is a huge requirement. We are just started so we will be doing you know as as you know there's a new technology we got to be very we are we are the first you know ensure that this technology is deployed and then and then we will do the scale it up you know slowly.

Speaker #2: So the pipeline is quite, quite robust.

Speaker #4: Right. Sir lastly how if you could share the export contribution in order inflows and revenues.

Amit Anwani: Right. Sir, lastly, if you could share the export contribution in order inflows and revenues.

N. Venu: Export contribution on the revenues is ballpark around 25%. That is the trend that we are seeing at the moment.

Speaker #2: So, export contribution to the revenues is, ballpark, around 25%. So that is what we are seeing at the moment.

N. Venu: Export contribution on the revenues is ballpark around 25%. That is the trend that we are seeing at the moment.

Speaker #4: Understood, sir. Thank you, sir. Thank you so much.

Amit Anwani: Understood, sir. Thank you, sir. Thank you so much.

Speaker #2: Sure.

N. Venu: Yep.

Speaker #1: Thank you. Ladies and gentlemen in order that the management is able to address questions from all participants in the queue you are requested to please restrict yourselves to two questions only.

Operator 2: Thank you. Ladies and gentlemen, in order that the management is able to address questions from all participants in the queue, you are requested to please restrict yourselves to two questions only. You may rejoin the queue if you have any follow-up questions. Our next question comes from the line of Shirom Kapur with Jefferies. Please go ahead.

Operator: Thank you. Ladies and gentlemen, in order that the management is able to address questions from all participants in the queue, you are requested to please restrict yourselves to two questions only. You may rejoin the queue if you have any follow-up questions. Our next question comes from the line of Shirom Kapur with Jefferies. Please go ahead.

Speaker #1: You may rejoin the queue if you have any follow-up questions. Our next question comes from the line of Shirom Kapoor with Jefferies. Please go ahead.

Speaker #5: Hi sir. Thanks for the opportunity. My first question is on your margin. So while of course at the you're operating a bidder margins have improved very well YOY but on the gross margin side there seems to have been a contraction of you know over 300 and 50 basis points.

Shirom Kapur: Hi, sir. Thanks for the opportunity. My first question is on your margin. While of course your operating EBITDA margins have improved very well YOY, on the gross margin side, there seems to have been a contraction of over 350 basis points. If you could comment on that, what has driven this gross margin contraction? Is it a function of mix or maybe the commodity costs, where we have not been able to pass through the entire commodity inflation? Could you give a bit more color on that?

Speaker #5: So if you could comment on that what has driven this gross margin contraction is it a function of mix or maybe the commodity costs where you know we have unable not been able to pass through the entire commodity inflation.

Speaker #5: Could you give a bit more color on that?

Speaker #2: So, we are talking about the gross margin. I see the gross margin, compared to the previous quarter, has improved in my view.

N. Venu: You are talking about the gross margin. I see the gross margin compared to the previous quarter, it is improved in my view.

Speaker #5: Actually you're on your side that's that's what my question was. On a year on year basis.

Shirom Kapur: Actually year on year, sir. That is what my question was.

N. Venu: Yeah.

Shirom Kapur: On a year-on-year basis.

Speaker #2: So on year on year on year basis I think it's you're talking about 0.2 0.3 basis point right? On even even you talk on year year on basis I think basically there also I see an improvement not contraction in the gross margin.

N. Venu: On year-on-year basis, I think we are talking only 0.2, 0.3 basis points, right? Even if you talk on year-on-year basis, I think there also I see improvement, not contraction in the gross margin.

Shirom Kapur: Okay. I can check on that and come back. My second question is on the BESS side. You of course highlighted you won your first order on BESS. Could you elaborate on what exactly our offering is here in BESS? Who is the competition? What are the kind of products that we're offering? Is the margin profile here similar or better versus the rest of the business?

Speaker #5: okay I mean I I can check on that and and come back but okay my my second question is on you know on the best side.

Speaker #5: So you of course highlighted one of your first order on best. You know do could you you know elaborate on what exactly are offering is here in best who is the competition you know what are the kind of products that we're offering and is is the margin profile here similar or better versus the rest of the business?

Speaker #2: No I think this is the what we are talking about is a battery energy storage is everything is it's a more of a modular and scalable versions what we have we have unveiled during our investors time.

N. Venu: No, I think what we are talking about is the battery energy storage is everything. It's more of a modular and scalable versions, what we have unveiled during our investors day. It doesn't include the batteries. Normally we don't pull batteries into that because we design what kind of battery is required, the customers will place the batteries on that. Right now the margin profile is, as you know, this technology needs to get matured. We need to also do a lot of localization. Over a period of time, these margins also will become similar to the margins that we have with that. The key is that this is a scalable version where it's easy to fit, easy to do that, and there's a lot of revenue potential going forward on that.

Speaker #2: Investor Day thing, and it doesn't include the batteries. So, normally, we don't pull batteries into that because for batteries, we design what kind of batteries are required, and the customers will place the batteries on that.

Speaker #2: So right now the margin profiles is is as you know this technology need to get matured. We need to also do a lot of localizations so over a period of time this margin is also will become similar to the margins what we have with that.

Speaker #2: But the key is that besides the this is a scalable version where you know easy to fit easy to do that and there's a lot of revenue potential going forward on that because we do a lot of digital.

N. Venu: We do a lot of digital layer onto that so that we are able to monitor and provide the digital services going forward in that. As I said, we got the first order, we got to execute. We're going to also look at what are the things. It's the end-to-end we offer to our customers excluding the battery. Integrating the battery into the software of the battery management is also part of our solutions.

Speaker #2: You know layer onto that so that you know we are able to monitor and provide the digital services going forward in that. So it it will be it will be as I said we got the first also look at what are the you know things and it's the end to end we offer to our customers excluding the batteries but the man but integrating the battery into the into the software of the battery management is also part of our solution.

Speaker #5: Got it. Yeah.

Shirom Kapur: Got it.

N. Venu: Excuse me, just for the earlier question. When we see as a year end, more or less the gross margin is same. When you compare with the same period, yes, there is some contraction, but that is mainly because of the product mix that we are going to execute. This is mostly dependent upon the product mix.

Speaker #2: Excuse me, just to follow up on the earlier question. When we see at the year end, there is no, you know, more or less, the gross margin is the same. But when you compare with the same period, yes, there is, you know, some contraction. But that is mainly because of the product mix that we have executed.

Speaker #2: So, this is mainly dependent upon the product mix.

Speaker #5: Got it sir. Just lastly on you know just the bookkeeping question on your order flow. So you mentioned that you know year on year excluding HVDC orders we saw 26% growth.

Shirom Kapur: Got it, sir. Just lastly, just a bookkeeping question on your order flow. You mentioned that year-on-year excluding HVDC orders, we saw a 26% growth.

Speaker #5: Just to clarify in your second quarter presentation last year you had mentioned that you know versus the first quarter last year you had seen 28% growth in your order flow.

N. Venu: Yeah.

Shirom Kapur: Just to clarify, in your Q2 presentation last year, you had mentioned that versus the Q1 last year, you had seen 28% growth in your order flow. That number implies you did about INR 2,200 crore in the Q2 last year orders. That would imply about INR 1,700 crore ex HVDC orders in the Q1. Here if we look at your Q1 this year, out of INR 5,000, if we exclude the INR 1,700, you've done about INR 3,300 crore of orders. That seems to be more than a 26% increase. Sorry.

Speaker #5: So that number implies you know you did about 2200 crores in the second quarter last year orders so that would imply about 1700 crore x HVDC orders in the first quarter.

Speaker #5: But here if we look at your first quarter this year out of 5000 if we exclude the 1700 you've done about 3300 crores of orders.

Speaker #5: So that seems to be more than a 26% increase you know. Sorry.

Speaker #2: We remove also the HVDC both when we compare we remove the HVDC from both sides. We remove also HVDC quarter we remove HVDC from that quarter.

N. Venu: We remove also the HVDC both. When we compare, we remove the HVDC from both sides. We remove all the HVDC from the quarter, we remove HVDC from that quarter.

Speaker #5: Right. Right sir. That's so just to understand if we take the 26% year on year growth so that means whatever number we get for the first quarter last year that would be the x HVDC number which means that the balancing would be the HVDC order in the first quarter of last year would that be the correct understanding?

Shirom Kapur: Right. Just to understand, if we take the 26% year-on-year growth, that means whatever number we get for Q1 last year, that will be the ex-HVDC number, which means that the balancing would be the HVDC order in Q1 of last year. Would that be the correct understanding?

Speaker #2: More or less yes.

N. Venu: More or less, yes.

Speaker #5: Got it sir. Thank you so much.

Shirom Kapur: Got it, sir. Thank you so much.

Speaker #1: Thank you. Our next question is from the line of Parikshit Kanpal with HDFC Securities. Please go ahead.

Operator 2: Thank you. Our next question is from the line of Parikshit Kandpal with HDFC Securities. Please go ahead.

Operator: Thank you. Our next question is from the line of Parikshit Kandpal with HDFC Securities. Please go ahead.

Speaker #3: Yes sir hi congratulations and a great quarter and a strong order in flow. So so my first question is out of if I remove this HVDC order of 1700 so balance is about 3383 or 3400.

Parikshit Kandpal: Yes. Sir, hi. Congratulations on a great quarter and a strong order inflow. My first question is, if I remove this HVDC order of INR 1,700 crore, balance is about INR 3,300 crore or INR 3,400 crore. All of that, how much is the base order? I mean, more regular base orders, I mean, excluding the data center and the BESS order.

Speaker #3: So out of that how much is the base order I mean more regular base orders I mean excluding the data center and the best order?

Speaker #2: Every most of them are base orders. We don't have any major large orders in this quarter. All are base orders. It's a quite a good good strong thing from the data center this quarter.

N. Venu: Most of them are base orders. We don't have any major large orders throughout this quarter. All are base orders. It's a quite good, strong thing from the data center this quarter.

Speaker #3: So the data center would be a large order right? I mean almost 400 to 500 crores and I think even best will be.

Parikshit Kandpal: The data center would be a large order, right? I mean, almost INR 400 to 500 crores, and I think even BESS will be.

N. Venu: The data center is a multiple order. It's not a one order. It's a data center, multiple orders there.

Speaker #2: Data center is multiple orders. It's not just one order. There are multiple orders for data centers here.

Speaker #3: Okay. Okay. And this best you are doing is it for the utility grade customer or is it a CNI customer I mean from which you are doing the best?

Parikshit Kandpal: Okay. This BESS you are doing, is this for the utility-grade customer or is it a C&I customer, I mean, for which you are doing the BESS?

Speaker #2: It's a CNI customer.

N. Venu: It's a C&I customer.

Speaker #3: So you are focused largely will be on the CNI segment right? Not at the utility scale.

Parikshit Kandpal: Your focus largely will be on the C&I segment, right? Not at the utility scale.

Speaker #2: No we will also do what a period of time utility customer. As I said we are doing first thing you know where we need to see how you know our our our you know product will fit into that.

N. Venu: No. We will also do a volume of time utility customer. As I said, we are doing first thing, where we need to see how our product will fit into that. Those are the things we will do. We are not limiting only to C&I.

Speaker #2: So those are the things we'll do. We we we are not limiting only to CNI.

Speaker #3: Okay, okay. So my second question is on this quarter's revenue. Just to understand, I mean, there is a dip in the gross margin.

Parikshit Kandpal: Okay. Sir, my second question is on this quarter's revenue. Just wanted to understand, I mean there is a dip in the gross margin. What I understand is that if there is a contribution coming in from the two HVDCs on the revenue front, the GPM may be slightly lower, but it has been neutralized with uplift at the EBITDA level. Just wanted to understand how much is the contribution of the HVDC project in the revenue in this quarter.

Speaker #3: So, what I understand is that if there is a contribution coming in from the two HVDCs on the revenue front, the GPR may be slightly lower, but it may neutralize at the top level at the data level.

Speaker #3: So, I just wanted to understand how much is the contribution of the HVDC project in the revenue in this quarter?

N. Venu: See, actually we do not give the breakup separately on the margins for the respective segments. Overall, as I explained, the gross margin, if you compare from the last quarter, it has improved. If you compare from Y on Y basis, it has a slight contraction, and that is mainly coming out the different product mix that we are executing. Again, if you compare from the March year-end closing, we are consistent. Also remember that it is the Q1. It is the Q1 is a generally a very soft quarter from various other things standpoint.

Speaker #2: See we actually we do not you know give the breakup separately you know on the margins for the respective segments. So overall as I explained the the gross margin if you compare from the last quarter it has improved.

Speaker #2: If you compare from a year-on-year basis, it has a slight contraction, and that is mainly coming off the different product mix that we are executing.

Speaker #2: But again if you compare from the March year end closing we are consistent. And also remember that the first quarter it's the first quarter is a generally a very soft quarter.

Speaker #2: From from various other things standpoint.

Speaker #3: No sir I just wanted the revenue revenue of the HVDC share of revenue. I don't want the margins. I just want to understand in this quarter's revenue how much is this contribution from the HVDC project.

Parikshit Kandpal: No, sir. I just wanted the revenue of the HVDC, share of revenue. I do not want the margins. I just want to understand in this quarter's revenue, how much is this contribution from the HVDC project, the two HVDC projects. Approximately, I mean, if you can give some color on that.

Speaker #3: The two HVDC projects. Approximately I mean if you can give some color on that.

Speaker #2: So, yeah, if you have been following us, we have been telling you that in the first year, the revenue execution will be slightly on the lower side, and then it will pick up from the second and third year.

N. Venu: Look, if you have been following us, we have been telling you know that the first year, the revenue execution will be slightly on the lower side, and then it will pick up on the second and third year. That is what we have been telling. This is also all the HVDC revenues has not been flowed, or it is not there in this particular quarter. That much we can say. It is picking up.

Speaker #2: That is what we have been telling. So this is also all the all the HVDC revenues are has not been flown or it is not there in this particular quarter.

Speaker #2: That much you can say. But it is picking up, unless in the first project, Kavda project is—is picking up. Basala project is—it'll start, but Kavda is picking up.

Parikshit Kandpal: It's picking up.

N. Venu: At least in the first project, Khavda project is picking up. Bhadla project is short, but Khavda is picking up.

Speaker #3: So this quarter largely is the base revenue quarter. So no major contribution from HVDC revenues.

Parikshit Kandpal: This quarter largely is a base revenue quarter, so no major contribution from HVDC revenues.

Speaker #2: No, there is some contribution from the HVDC. It's not that nothing is there; there is.

N. Venu: No, there is some contribution from the HVDC. It is not that nothing is there.

Speaker #3: Okay. No, sir, thank you. Okay. Thank you, sir.

Parikshit Kandpal: Okay.

N. Venu: There is.

Parikshit Kandpal: Got that. Thank you. Okay. Understood.

Speaker #1: Thank you. Our next question is from the line of Rahul Gajare with Macquarie. Please go ahead.

Operator 2: Thank you. Our next question is from the line of Rahul Gajare with Macquarie. Please go ahead.

Operator: Thank you. Our next question is from the line of Rahul Gajare with Macquarie. Please go ahead.

Speaker #5: Yeah, hi. Good evening. Thanks for the opportunity, and congratulations on a very strong first quarter performance. Sir, I have got two questions. One, how much of the order backlog is coming from the export market? And, if possible, could you give us geographically which markets you are getting the export business from?

Rahul Gajare: Yeah, hi. Good evening. Thanks for the opportunity, and congratulations on a very strong Q1 performance.

N. Venu: Thank you.

Rahul Gajare: Sir, I have two questions. One, how much of the order backlog is coming from the export market? If possible, you could give us geographically which markets you are getting the export business. That's the first question. The second question is, once you finish your entire CapEx that you have lined up, including backward integration, component manufacturing, is it possible to give us some qualitative sense of how Hitachi will be placed vis-à-vis Korean or Mexican manufacturing? These are the two questions. Thank you very much.

Speaker #5: That's the first question. And the second question is you know if you you know once you finish your entire Capex that you have lined up you know including backward integration component manufacturing is it possible to give us some qualitative sense of how Hitachi will be placed vis a vis you know Korean or Mexican manufacturing?

Speaker #5: So these are the two questions. Thank you very much.

Speaker #2: So on the on the exports as part of our this thing is roughly ballpark we are again we are trending 25 26%. Let me just check one thing.

N. Venu: On the export side, part of our this thing is roughly ballpark, again, we are trending 25% to 26%. Let me just check once. Give me a minute.

Speaker #2: Give me a minute. Oh, and the overall order backlog — if you're talking about our order backlog of 30,000–32,000 crores — our exports are in the range of, you know, plus or minus 25%.

Rahul Gajare: Yeah.

N. Venu: On the overall order backlog, if you are talking about our order backlog of INR 32,000 crore, in that our exports in the range of ±25%, yeah.

Speaker #2: Plus or minus 25%. Yeah. What was your second question?

Rahul Gajare: Okay.

N. Venu: Yeah. What was your second question?

Speaker #5: Sir, second question is you know once your entire Capex is done you know which basically you are doing a lot of backward integration including component manufacturing.

Rahul Gajare: Sir, second question is, once your entire CapEx is done, which basically you are doing a lot of backward integration, including component manufacturing, I wanted to understand how will Hitachi Energy India will be competitive vis-à-vis Korean players or Mexican players. Some qualitative sense, if not quantification is possible.

Speaker #5: I wanted to understand how will Hitachi Energy India will be competitive vis a vis you know Korean players or Mexican players. So some qualitative sense if not quantification is possible.

Speaker #2: No, but we are already competing with Mexican, Korean, or everyone, right? So our manufacturing here is to, you know, increase our capacity. Also, of course, we are localizing some of those components here for that.

N. Venu: We are already competing with Mexican, Koreans, and everyone, right?

N. Venu: Our manufacturing here is to increase our capacity, and also, of course, localizing some of those components here for that.

Rahul Gajare: Correct.

Speaker #2: But I don't see any issue with competing with any of those players.

N. Venu: I don't see any issue with competing with any of those players.

Speaker #5: No so once.

Rahul Gajare: No.

Speaker #2: Or or or Mexicans or anyone for that matter. Our our requirement is to compete is that as long as there's a level playing field is there we have no issue in competing there.

N. Venu: Mexicans or anyone for that matter.

Rahul Gajare: No.

N. Venu: Our requirement is to compete is that as long as there's a level playing field is there, we have no issue with competing with anyone.

Speaker #2: Anyone.

Speaker #5: No actually what I was trying to get to was you know once you have more backward integration you you are obviously better placed localization will obviously lower your cost.

Rahul Gajare: No, actually what I was trying to get to was, once you have more backward integration, you're obviously better placed. Localization will obviously lower your cost. From that perspective, you will be maybe 10% more cheaper to manufacture compared to what you are today. That's where I was trying to get to.

Speaker #5: So, from that perspective, you know that you will be maybe 10% cheaper to manufacture compared to what you are today. That's where I was trying to get to.

Speaker #2: No we we as I said you know it's definitely our our volume and other things will take us you know give us a more leverage that's a different issue.

N. Venu: No, as I said, it's definitely our volume and other things will give us more leverage. That's a different issue. The whole idea is we continue to localize more and more components and also create end-to-end manufacturing scenario over a period of time, right? That's our intention, why we are doing these kind of CapEx.

Speaker #2: But you know, the whole idea is we continue to, you know, localize more and more components and also create an end-to-end manufacturing scenario over a period of time, right.

Speaker #2: That's our intention why we are doing these these kind of Capex.

Speaker #5: Okay fine. Thank you very much sir and all the very best.

Rahul Gajare: Okay, fine. Thank you very much, sir, all the very best.

Speaker #2: Thank you.

Speaker #1: Thank you. Our next question comes from the line of Jason Sones with IDBI Capital. Please go ahead.

N. Venu: Thank you.

Operator 2: Thank you. Our next question comes from the line of Jason Soans with IDBI Capital. Please go ahead.

Operator: Thank you. Our next question comes from the line of Jason Soans with IDBI Capital. Please go ahead.

Speaker #3: Yeah thank you so much sir for taking my question. Congrats on a good set of numbers. So first question just yeah. So first question just pertains to how is the HVDC pipeline looking the BAMA project is there and just an update on how is it looking from a six months to one year point of view awarding etc.

Jason Soans: Yeah. Thank you so much, sir, for taking my question. Congrats on a good set of numbers. Sir, first question.

N. Venu: Thank you.

Jason Soans: Yeah. First question just pertains to how is the HVDC pipeline looking, the Bama project is there, and just an update on how is it looking from a six-month to one-year point of view, awarding, et cetera. How is it looking?

Speaker #3: How is it looking?

N. Venu: Yeah. I think as you all know that there is an HVDC project, greenfield HVDC project is already bidding for our customers as well. We expect that should be awarded in six months or early.

Speaker #2: Yeah I think I you all know that you know there are there is an HVDC project full you know greenfield HVDC project is already bidding for our customers and as well as and we expect that should be awarded in six months or or yearly.

Speaker #3: Okay okay. And sir also during the quarter there was a news about the entry of basically the government you know allowing the entry of four Chinese players into the market basically that will probably they'll be more catering to the GIS side and the transformer side.

Jason Soans: Okay. Sir, also, during the quarter, there was a news about the entry of basically the government allowing the entry of four Chinese players into the market. Basically, they'll be more catering to the GI side and the transformer side. I just wanted your opinion, your color on how do you take this up? There's a 60% to 65% local content thing also is there. Just wanted to know your understanding of this aspect. Will it push prices down? How do you see this thing going ahead?

Speaker #3: So I just wanted to know your opinion, your color, on how you take this up. There's a 60–65% local content thing also, is there?

Speaker #3: So I just wanted to know your understanding of this aspect. Will it push prices down? How do you see this thing going ahead?

Speaker #2: So our view is very clear. You know any more competition is absolutely welcome to meet the demand and supply challenges or perceived demand and supply challenges if any.

N. Venu: Our view is very clear. Any more competition is absolutely welcome to meet the demand and supply challenges, perceived demand and supply challenges, if any. Our thing is very clear. As long as the level playing field is there and we do not see any issue in competing and also ensuring that whatever our margin ambition is matching that. Coming back to this specific question here in this particular case, out of that one transformer and the others who are the switchgear, the GIS, et cetera, they were already competing in some form or other form. It may not be in some segment, but other segments, it does. I don't see any major material impact for us.

Speaker #2: And and our thing is very clear as long as the level playing field is there and we do not see any issue in in you know competing and also ensuring that you know whatever our margin ambition is met in that.

Speaker #2: So coming back to the specific question here and here in this particular case out of that one transformer and the other thing others were switch gear GIS etc.

Speaker #2: They were already competing in some form or other form you know in may not be in some segment but other segments in that. I don't see any major material impact for for for for us.

Speaker #3: Excellent, sir. Okay, okay. But sir, PBA being one of the largest players, do you think—I mean, do you still feel competition, etc., will be okay, and that we’ll be able to, you know, fight that threat going ahead?

Jason Soans: Sure, sir. Okay. Sir, PFC being one of the largest players, do you still feel competition, et cetera, will be okay as far as we'll be able to thwart that threat going ahead?

Speaker #2: Absolutely, absolutely. No, we don't see any major threat at this point in time.

N. Venu: Absolutely. No, we don't see any major threat at this point in time.

Speaker #3: Sure. Thank you so much sir. Thank you so much for answering my question. Thank you.

Jason Soans: Sure. Thank you so much. Thank you so much for answering my questions. Thank you.

Speaker #1: Thank you. Our next question comes from the line of Umesh Raut with Nomura. Please go ahead.

Operator 2: Thank you. Our next question comes from the line of Umesh Raut with Nomura. Please go ahead.

Operator: Thank you. Our next question comes from the line of Umesh Raut with Nomura. Please go ahead.

Speaker #3: Hi sir. Good evening and congrats for very good set of numbers. My first question is pertaining to VSS capability that we have. So if I understand.

Umesh Raut: Hi, sir. Good evening. Congrats for very good set of numbers.

N. Venu: Thank you.

Umesh Raut: My first question is pertaining to BESS capability that we have. If I understand-

Speaker #2: Sorry sorry which one first? Yes yes.

N. Venu: I'm sorry, which one? First, repeat. BESS?

Speaker #3: BSS capability. If I understand correctly, I think the scope of work that you can cater to is basically pertaining to, say, inverters, PCS solutions, then probably integration between cell and grid connection.

Umesh Raut: BESS capability.

N. Venu: Oh, okay.

Umesh Raut: If I understand correctly, I think the scope of work that you can cater to is basically pertaining to, say, inverters, PCS solutions, then probably integration between cell and grid connection. That's what you can offer. How much of this is basically localized, and whether those capacities are currently ready with you?

Speaker #3: So that's what you can offer. So how much of this is basically localized, and whether those capacities are currently ready with you?

Speaker #2: Yeah. No I'm sorry. Battery energy storage we have you know we approach this segments in two ways. You know one segment where we will also supply you know our our PCS solutions which we are not localized yet.

N. Venu: On the battery energy storage, we approach this segment in two ways. One segment where we will also supply our PCS solutions, which we are not localized yet, whenever we localize. That will be supplied to our battery energy storage developers. The second one is through our grid integration business, we will also do the complete battery energy storage solutions end-to-end. End-to-end means we will not do the civil and other things, but right from the grid connection till the last thing, we'll do that. In this case, we are doing a complete containerized and scalable solution. We don't pull batteries into our thing. We're excluding batteries, we do complete design, complete automation, and also PCS, and everything, grid connection, everything, we do that. It's a end-to-end solution. Customer can take this and put into this.

Speaker #2: Whenever we localize, that will be supplied to our battery energy storage developers. And the second one is through our grid integration business. So we will also do the complete battery energy storage solutions end to end. End to end means we do not do the civil and other things, but right from the grid connections until the last thing, we'll do that.

Speaker #2: But in this case we are doing a complete containerized and and scalable solution and we don't you know pull batteries into our our thing.

Speaker #2: We're excluding batteries, but we do complete design, complete automation, and also PCS and everything—grid connection, everything—we do that. It's end-to-end solutions; the customer can take this and put it into this.

Speaker #3: Understood. So, would that software also be part of this package?

Umesh Raut: Understood. DISS software would be also part of this package?

Speaker #2: Yes.

N. Venu: Yes.

Speaker #3: Understood. Second question is pertaining to slide number ten where you are indicating probably downturn in terms of growth for transmission as well as railway and metro in first quarter.

Umesh Raut: Understood. Second question is pertaining to slide 10, where you are indicating probably downturn in terms of growth for transmission as well as railway and metro in Q1. If I also look at your order mix between utility for last year, Q1 and this year, I think it is down. Any read through here? Is it a temporary where you see?

Speaker #3: And if I also look at your order mix between utility for last year one quarter and this year I think it is down. So any read through here is it a temporary thing where you see probably.

N. Venu: It's a temporary thing, the transmission temporary thing. I don't see that as any major issue there. The rail as such, there is a bit of, the projects are not coming as per plan. When we talk to the rail authorities and the metro authorities, we expect that should come in H2 of the year, and that should pick up in that. The transmission is just a timing issue, and also it's also our ability to pick up everything. Whether it is meeting the delivery requirements, et cetera, there's sometimes those other things also will play a role, not as a segment issue.

Speaker #2: It's a temporary thing in the transmission—just a temporary thing. I don't see that as any major issue there. The rail, as such, you know, there is a bit of, you know, the projects are not coming as per plan, and when we talk to the rail authorities and the metro authorities, we expect that should come in the second half of the year and that should pick up then.

Speaker #2: The transmission is a just a timing issue and also you know we we it's also our ability to pick up everything right whether it is a meeting the delivery requirements etc.

Speaker #2: In that, sometimes those other things also will play a role—not as a segment issue.

Umesh Raut: Understood. Third question is basically the data center order that you have received during the quarter. Now that you have received the order, any color about opportunity that you can cater on a per gigawatt basis in terms of, say, value in case of data center? Second, I guess there is one large project from Hyderabad, that is from one of the leading MNC company. Would this be an exclusive collaboration that you have?

Speaker #3: Understood. Third question is basically about the data center order that you have received during the quarter. So, now that you have received the order, any color about the opportunity that you can cater to on a per-gigawatt basis in terms of value, in the case of data centers?

Speaker #3: And second I guess there is one large project from Hyderabad that is from one of the leading MNC company. So would this be a exclusive collaboration that you have?

Speaker #2: No I think we we are competing right now. Most of the data center customers are already you know securing the long lead items like a transformer like a direct drive transformer the GIS etc.

N. Venu: No, I think we are competing right now. Most of the data centers customers are already securing the long lead items like a transformer, like a dry type transformer, the GIS, et cetera, and that's where we are getting the orders in that. As you know, this is our portfolio. Our portfolio will be all the grid integration, GIS, the transformers, the dry type transformers, all the power transformers, et cetera, will go down, including the services, and we have been working on this. We also have our other portfolio we have just launched, what we call as a Grid-to-Rack, and we have shown in our investors meet in Mumbai, Grid-to-Rack. We are still working on that, where the Grid-to-Rack is a modular, scalable, where all the products will fit into that. For them, customer is more like a fit into it.

Speaker #2: And that's what we are we are getting the orders in that. And as you know that we also this is this is our portfolio right.

Speaker #2: Our portfolio will be our all the grid integration GIS the transformer the direct drive transformer of the power transformer etc. will go there including the services and we have been working on this.

Speaker #2: We also have other portfolios. We have just launched what we call 'Grid to Rack.' We have shown it in our investors meet in Mumbai—'Grid to Rack.'

Speaker #2: So we are still working on that where the grid to rack is a modular scalable where all the product will fit into that in a for them customer is is more like a fit into it you know.

Speaker #2: So those are the things we have launched. So we are working on that with some customers to see whether it makes sense for the customer as well as for us.

N. Venu: Those are the things we have launched. We are working on that with some customers to see whether it makes sense for the customer as well as for us.

Speaker #3: Understood. If I can squeeze one more just last question. Which is basically on transport side on slide number five you have mentioned about large program related to kinet railway solutions.

Umesh Raut: Understood. If I can squeeze one more, just last question, which is basically on transport side, on slide number five, you have mentioned about a large program related to Kinet Railway Solutions. What is your scope of work here, and how big ordering opportunity would be from these train sets?

Speaker #3: So what is your scope of work here and how big ordering opportunity could be from these train sets?

Speaker #2: No, I think this is, you know, what we talked about—Indian Railways, Kinet Railway Solutions—to manufacture one-day passes, sleeper trains. I think this is coming up.

N. Venu: No, I think this is what we talked about Indian Railways, Kinet Railway Solutions to manufacture one-day sleeper trains. I think this is coming up. Our scope of work is, again, it's depending upon whether it is the engines or the cross-country electrification. All our core business unit portfolio will go into that, depending upon that. If it is only for the locomotives, then you'll get this traction and transformer will go into it.

Speaker #2: Our scope of work is again it's a a depending upon the whether it is you know the the the engines or the cross country electrification.

Speaker #2: So all of our you know the four BA business unit portfolio will go into that depending upon that. It will only only for for the you know locomotives then then you'll get the you know this trust and transformer will go into it.

Speaker #3: Understood. Any any color on the quantum side in terms of value how much of the opportunity.

Umesh Raut: Understood. Any color on the quantum side in terms of value and the opportunity?

N. Venu: No, we don't have at this point in time. We don't want to also share as a segment-wise that part.

Speaker #2: No we we we don't have at this point in time. We don't want to also share on the segment wise the quantum.

Speaker #3: Sure. Sure. All the very best. Thank you so much.

Umesh Raut: Sure. All the very best. Thank you so much.

Speaker #2: Yeah.

Speaker #3: Thank you.

Operator 2: Thank you. Ladies and gentlemen, you are requested to please restrict yourselves to two questions only. If you have any further questions, you may rejoin the queue. Thank you. Our next question comes from the line of Sumit Kishore with Axis Capital. Please go ahead.

Operator: Thank you. Ladies and gentlemen, you are requested to please restrict yourselves to two questions only. If you have any further questions, you may rejoin the queue. Thank you. Our next question comes from the line of Sumit Kishore with Axis Capital. Please go ahead.

Speaker #1: Ladies and gentlemen you are requested to please restrict yourselves to two questions only. If you have any further questions you may rejoin the queue.

Speaker #1: Thank you. Our next question comes from the line of Sumit Kishore with Axis Capital. Please go ahead.

Speaker #4: Good evening. Thanks for the opportunity. My first question is in relation to your order backlog of ₹22 billion. Roughly, what percentage of this is non-HVDC right now? And of the non-HVDC order backlog, do you know roughly where we are on the proportion of data center contracts?

Sumit Kishore: Good evening. Thanks for the opportunity. My first question is in relation to your order backlog of INR 22 billion. Roughly what percentage of this is non-HVDC right now? Of the non-HVDC order backlog, roughly where are we on the proportion of data center contracts? Broadly, if you could also comment on the momentum on the data center order prospects that you are seeing. Is this growing exponentially or this is still an opportunity which is already maturing?

Speaker #4: And broadly if you could also comment on the momentum on on the data center order prospects that you are seeing is this growing exponentially or you know this is still an opportunity which which is already maturing?

Speaker #2: No, on the order backlog, we don't give specifically how much is HVDC. You know, we have not given that so far. As you know, these are all very, very equivalent projects coming up, so we don't like to do that.

N. Venu: No, on the order backlog, we don't give specifically how much is HVDC. We're not given so far. As you know, these are all very equivalent projects are coming up, so we don't like to do that. You should please respect that. You can make your own guess. We have given enough indications and things for you to understand how much could be that. That's number one.

Speaker #2: So we should please respect that. But you can make your own guess. We have given enough indications enough things for you to understand how much could be in that.

Speaker #2: That's number one. And the number two

Sumit Kishore: On data centers, if you could.

Speaker #4: Data centers if you could.

Speaker #2: The data center you know data center it is in this quarter it's quarter quarter large. Okay. In this quarter quarter large. Okay. The visibility for us going forward is also very strong.

N. Venu: Data center in this quarter, it's quite a launch. Okay, in this quarter, quite a launch. Okay, the visibility for us going forward is also very strong. The key is when we talk to data center developers, they say that there's a lot of plans are there. The key is that there should be a lot of support from governments to ensure that the land and the data center customers, their gestation period is very sharp. It's not like a long gestation period. They wanted to develop wherever it is available there. I think that is what we are looking at it, whether this particular strong pipeline will be sustainable going forward. If you see whatever they're talking about, 15 gigawatt by 2030, if that is true, then this thing will be sustainable going forward.

Speaker #2: So the key is, when we talk to data center developers, they say that there are a lot of plans out there. The key is that, you know, there should be a lot of support from governments to ensure that the land and, you know, the data center customers get the gestation period to be very, very short.

Speaker #2: It's not like a large long long gestation period. So they wanted to develop wherever it is available there. So I think that is what I we are looking at it whether this particular strong pipeline will be sustainable going forward.

Speaker #2: If you see whatever they are talking about you know 15 gigawatt by 2030 that is true then this thing will be sustainable going forward.

Speaker #4: Sure. My second question is you know in relation to your business which is into transformers you are insulated we understand against commodity price variations to a large extent given the demand supply mismatch.

Sumit Kishore: Sure. My second question is in relation to your business, which is into transformers. You are insulated, we understand, against commodity price variations to a large extent, given the demand-supply mismatch. What would you say would be the commodity price volatility for the non-transformer part of your business portfolio?

Speaker #4: What would you say would be the commodity price you know volatility for the non transformer part of your business portfolio?

Speaker #2: So at the moment we we see that we are not getting any material impact as such. So most of the contracts that we we have talked about let's say seven across seventy percent is you know variable clause we are having.

N. Venu: At the moment, we see that we are not getting any material impact as such. Most of the contracts that we have talked about, let's say above 70% is variable clause we are having. Overall, if you see, let's say in this quarter, there is no commodity impact per se. Even if there is small impact are being managed.

Speaker #2: So, overall, if you see, let's say in this quarter, there is no commodity impact per se. Even if you see small, small impacts, they are being managed.

Speaker #4: Got it. Thank you, and wish you all the best.

Sumit Kishore: Got it. Thank you and wish you all the best.

Speaker #2: Thank you.

N. Venu: Thank you.

Speaker #1: Thank you. Ladies and gentlemen we will take that as a last question for today. I would now like to hand the conference over to Mr. N.

Operator 2: Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to Mr. N. Venu, MD and CEO, for closing comments. Over to you, sir.

Operator: Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to Mr. N. Venu, MD and CEO, for closing comments. Over to you, sir.

Speaker #1: Venu, MD and CEO, for closing comments. Over to you, sir.

Speaker #2: Thank you very much. We are very pleased with our strong start to the financial year '27, and the business is executing very well. Market demand remains robust, and our pipeline is stronger.

N. Venu: Thank you very much. We are very pleased with our strong start to the financial year 2027, the business is executing very well. The market demand remains robust, our pipeline is stronger. While we remain mindful of our macroeconomic uncertainties, also West Asia crisis, elevated commodity prices, and project execution challenges that can arise in a dynamic environment, we are confident in our ability to capitalize on the opportunities ahead and continue creating a long-term value for our shareholders. Thank you once again for joining the call. If you need any more information, please reach out to Priyanka Bhagat, who heads the investor relations. We are happy to provide and engage with you as the case may be. Thank you very much and take care.

Speaker #2: And while we remain mindful of our macroeconomic uncertainties, as well as the West Asia crisis, elevated commodity prices, and project execution challenges that can arise in a dynamic environment, we are confident in our ability to capitalize on the opportunities ahead and continue creating long-term value for our shareholders.

Speaker #2: And thank you once again for joining the call and if you need any more information please reach out to Priyanka Priyanka Bhagat who heads the investor relations we are happy to provide engage with you as as a case study.

Speaker #2: Thank you very much, and take care.

Speaker #1: Thank you. On behalf of Hitachi Energy India Limited that concludes this conference. Thank you all for joining us. You may now disconnect your lines.

Operator 2: Thank you. On behalf of Hitachi Energy India Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your line.

Operator: Thank you. On behalf of Hitachi Energy India Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your line.

N. Venu: Thank you.

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Q1 2027 Hitachi Energy India Ltd Earnings Call

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