GEPIL - GE Power India Limited Share Price

Management provided an optimistic outlook for GE Power India Limited, emphasizing the continued focus on core services. They reported a 3.2% year-on-year increase in India's power consumption, amounting to approximately 146 billion units. Peak power demand was noted at 229 gigawatts, aligning with favorable weather conditions and a robust economic rebound. Looking ahead to 2026, management anticipates a 2.5% acceleration in coal demand, driven by industrial recovery.

For the first half of FY 2026, the company achieved a significant increase in order intake from INR 235 crores in H1 FY 2024-25 to INR 343 crores in H1 FY 2025-26. They noted a 23% overall sales growth, and following the amicable settlement with BHEL, a cash inflow of INR 340 crores is expected in tranches over the next few quarters. Notably, the core order backlog stood at INR 1,825 crores, reflecting a disciplined cash management approach.

Management highlighted the successful strategic demerger of the Durgapur facility to JSW Energy, effective July 1, 2025, indicating a commitment to streamline operations and enhance profitability focusing on high-margin shorter cycle opportunities. The standalone net worth of the company increased from INR 233 crores as of March 31, 2025, to INR 298 crores by September 30, 2025.

Moving into the second half of the fiscal year, management expressed confidence driven by operational excellence, improved order intake, and a solid financial footing, emphasizing a focus on profitability and consistent cash flow generation. They outlined that the strategy to penetrate international markets in seven countries has been fruitful, contributing to operational growth. Overall, management conveyed a clear commitment to driving a sustainable turnaround for GE Power India Limited.

1. Question: "The fall in outstanding orders. How would the Management explain this?" Answer: "The fall in orders is attributed to the Wanakbori complex turbine order worth INR 243 crores booked in the corresponding quarter last year. By comparing similar periods, we actually see an 18% increase in core order intake."

2. Question: "The current quarter, I think the gross margins are about 22% against a much higher gross margin about 42% in the corresponding quarter last year. How much of this includes the shipment to JP Power for which the revenue hasn't been recognized?" Answer: "Our gross margin stands at roughly 33% for the current quarter, driven mostly by core services. Additionally, we took a charge of INR 27 crores related to Jaypee, affecting this quarter's P&L. We expect gains from the recent settlement in the next quarter."

3. Question: "What kind of a settlement agreement is this? And why is BHEL paying you INR 340 crores?" Answer: "BHEL, a long-time partner, has agreed to settle INR 340 crores of our receivables in a phased manner due to some technical gaps identified from earlier projects. We've started receiving installments, and the first tranche of INR 50 crores was received in October."

4. Question: "What is the scalability of this Service business?" Answer: "Our services include parts supply, repair capabilities, and overhauls for all product lines. We maintain strong in-house capabilities and partner with entities in our group. Our strategy also allows for rapid execution of cash-positive contracts, so we're prepared for scalability in service offerings."

5. Question: "Can you tell me what will be the normalized profit after contents or any settlement or buybacks that we have done on account of Jaypee and BHEL?" Answer: "For the current quarter, we have a charge of INR 27 crores from Jaypee and a gain of INR 23 crores from the BHEL settlement, largely neutralizing each other. Thus, what shows as profit reflects our core operations during this half."