GEPIL - GE Power India Limited Share Price

During the Q4 FY 2025-26 earnings call, GE Power India Limited's management provided a positive outlook for the company. They highlighted that India's power sector is supported by strong demand driven by industrial growth and urbanization, creating opportunities for service-led offerings. The company emphasized its strategy to focus on higher-margin, shorter cycle opportunities while maintaining financial discipline.

Key forward-looking points included:

1. Order Book: As of March 31, 2026, the order book stood at INR 1,628 crores, reflecting a strategic alignment with service-led and margin-accretive opportunities. The company anticipates around 85-90% of this backlog to be executable in FY 2026-27.

2. Revenue Growth: The company reported revenue of INR 1,269 crores for FY 2025-26, marking a 21% increase from the previous year, driven largely by core services and upgrades, which grew by 14% and 24% respectively.

3. Profitability: A significant turnaround was noted, with profit before tax for the full year reaching INR 340 crores compared to INR 22 crores in FY 2024-25. However, the underlying EBITDA margin was reported at 11% for the year.

4. Dividend Declaration: The board recommended a dividend payout of INR 7 per equity share, representing 70% of the face value, marking the first dividend distribution in the last four years.

5. International Expansion: The company is expanding its presence across several international markets, including Saudi Arabia, Turkey, and Indonesia, reinforcing its positioning in thermal services.

6. Demerger Plans: The planned demerger of the Durgapur manufacturing facility to JSW Energy is expected to enable a more asset-light and service-led operational model.

Overall, the management expressed confidence in continuing to strengthen core services, improve margins, and maintain disciplined execution as they move into the future.

Q&A Summary from GE Power India Limited Q4 FY 2025-26 Earnings Call

1. Question: What is the focus of GE Power India regarding gas turbine HRSG systems?

Answer: We are not involved in the gas turbine business, including HRSG systems. Our focus is solely on steam and thermal business. While gas plants do include components like HRSG alongside steam turbines, these fall outside our current strategic objectives.

2. Question: What percentage of the core services order book is executable for FY '27?

Answer: Approximately 85% to 90% of our current order backlog will be executed in FY '27. These orders typically have shorter cycles, allowing us to deliver them within the year.

3. Question: What is the market size for maintenance, upgrades, and decarbonization services?

Answer: The target market size for our services in thermal power stations is estimated to be around INR 3,500 crores to INR 4,000 crores annually, driven by increasing demand for reliable power and plant availability.

4. Question: With the decline in order backlog, are we expecting revenues to be around INR 1,300 crores for FY '27?

Answer: Yes, with a significant portion of the backlog expected to be executed, we anticipate revenues to reach approximately INR 1,300 crores for FY '27. Our strategy has shifted towards higher-margin core services that will facilitate this.

5. Question: What does the INR 450 crores loan represent in terms of cash management?

Answer: The INR 450 crores is a lending arrangement with our cash pool entity, aimed at better returns on surplus working capital. It allows us to earn interest while ensuring liquidity for operational needs.

6. Question: What are the regulatory approvals pending for the Durgapur JSW demerger?

Answer: We currently await approvals from the NCLT, along with necessary clearances from stakeholders and government entities. We aim to finalize the demerger within 12 months from March 31, 2026.

7. Question: Will we lose manufacturing capabilities after the Durgapur demerger?

Answer: No, our core services will remain unaffected. We have secured a long-term service agreement with JSW Energy, ensuring we have access to necessary manufacturing capabilities for our boiler portfolio.

8. Question: What is your guidance for EBITDA margin for FY '27?

Answer: The normalized EBITDA margin for FY 2025-26 is 11%, considering one-off items. For FY '27, we aim to maintain or improve upon this figure, backed by our operational optimization initiatives.

This detailed summary provides key insights from the earnings call, highlighting significant questions and their responses concerning GE Power India's business performance and future strategies.