POWERINDIA — earnings call
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Questions and answers
· Research Analyst
Hitachi Energy India Limited “Q1 FY27 Analyst Conference Call” August 07, 2026
HITACHI · Research Analyst
Hitachi Energy India Limited August 07, 2026
Moderator · Conference 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.
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Please note, this conference is being recorded.
I now hand over the conference to Ms. Priyanka Bhagat, Investor Relations, Hitachi Energy India Limited.
Thank you, and over to you, ma'am.
Priyanka Bhagat
Good evening, everyone.
Thank you for joining us today for the Q1FY27 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.
Venu Nuguri
Thank you, Priyanka.
Good evening, everyone, and thank you very much for joining Hitachi
Thank you, Ajay.
Ladies & Gentlemen, our Q1 FY27 demonstrates the strength of our business model and the effectiveness of our execution strategy.
We delivered robust growth in orders, revenues, 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.
Let me now share our key priorities for FY27. Slide 14: Priorities Our focus remains on strengthening our core businesses in Utilities and HVDC, while ensuring the continuity and resilience of our installed base through our Services business unit.
At the same time, we remain committed to efficiently executing our strong backlog, enhancing productivity, and maintaining the highest standards of quality and customer satisfaction.
We are also well positioned to capitalize on emerging growth opportunities, particularly in Battery Energy Storage Systems (BESS), renewable integration, data centers, and grid modernization, where demand fundamentals remain highly encouraging.
Looking ahead, we will 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 stakeholders while contributing to a more resilient, secure, and sustainable energy future.
And now we open the floor for questions and answers.
Thank you very much.
Moderator · Conference Operator
Thank you.
We will now begin the question-and-answer session.
Our first question comes from the line of Amit Anwani with PL Capital.
Amit Anwani
Congrats for the strong set of numbers.
First question pertains to the 2GW Tennet order.
What is the quantum of that order of the total order inflow of this quarter?
And second, are we expecting more orders globally as a joint venture with L&T by Hitachi Energy India in the coming time?
Venu Nuguri
At this point in time, it is a combination of 3 orders.
In this, we look more of services and support from here.
The approximate value of order is around INR 1,700 crs.
Amit Anwani
Understood Sir.
Hitachi Energy India Limited August 07, 2026 The second question, I wanted to understand on the strong pipeline side, on the battery energy storage and data center, will you be primarily focusing on the domestic market as of now or there is an export opportunity?
Venu Nuguri
As you know very well, the domestic battery energy storage requirements are quite strong and robust.
It has been mandated that every renewable energy needs to have energy storage.
So, all those things are driving the huge amount of growth opportunities in domestic market.
And right now, our focus is to supply for the domestic market.
We have just started.
We first need to validate the technology we have deployed and then we will scale it up slowly.
However, order pipeline is quite robust.
Amit Anwani
Lastly if you could share the export contribution in order inflows and revenues?
Ajay Singh
Export contribution on the revenues is around 25%.
So that is the run rate we are seeing now.
Moderator · Conference Operator
Our next question comes from the line of Shirom Kapur from Jefferies.
Shirom Kapur
My first question is on your margin.
Of course, the operating EBITDA margins have improved very well Y-o-Y.
But 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 the commodity costs where we have not been able to pass through the entire commodity inflation?
Could you give a bit more colour on that?
Ajay Singh
I see the gross margin compared to the previous quarter; it has improved in my view.
Shirom Kapur
Sir, my question was on a YoY basis.
Ajay Singh
On YoY basis also, I see an 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 highlighted that you won first order on BESS.
Could you elaborate on what exactly our offering is here in BESS, who is the competition?
What is the kind of products that we are offering?
And is the margin profile here, is it similar or better versus the rest of the business?
Venu Nuguri
BESS order we have received is a modular and scalable solution, that we unveiled during Investor Day in May 2026.
We do everything except the batteries.
We just design what kind of batteries the customers would need to place on that.
The margin profile is difficult to mention at this stage as this technology needs to mature.
We need to do a lot of localization in this segment.
Over time, these margins will gradually reach the desired levels.
But the key is, it is a scalable version, and there is a lot of revenue potential going forward.
We do a lot of digital layers in this, so that we would be able to monitor and provide the digital services going forward.
We have got the first order; our objective is to execute.
It is an end-to-end project order excluding the batteries.
But integrating the battery into the software of the battery management is also part of our solution.
Hitachi Energy India Limited August 07, 2026
Ajay Singh
Just for the earlier question, when we compare the gross margin with the same period last year, there is some contraction, which is mainly because of the product mix that we have executed.
Shirom Kapur
Got it, sir.
Lastly on book-keeping question on your order flow.
Sir, you mentioned that YoY, excluding HVDC orders, we saw 26% growth.
In your Q2FY26 presentation, you had mentioned Hitachi Energy had seen 28% growth in order flow versus the Q1FY26.
So that number implies you did about INR 2,200 crs in the Q2FY26 orders.
But here, if we look at your Q1FY27 out of INR 5,096.5 crs if we exclude the INR 1,700 crs, you have done around INR 3,300 crs of orders.
So that is more than a 26% increase.
Venu Nuguri
We removed the HVDC from both the years we are comparing.
Shirom Kapur
Right, sir.
So just to understand, if we take 26% YoY growth, that means whatever number we get for the Q1FY26, that would be ex HVDC, which means that the balance of the total order would be the HVDC order in Q1FY26.
Would that be the correct understanding?
Venu Nuguri
More or less, yes.
Moderator · Conference Operator
Our next question is from the line of Parikshit Kandpal with HDFC Securities.
Parikshit Kandpal
Congratulations on a great quarter and a strong order inflow.
Sir, my first question is, if I remove this HVDC order of INR 1,700 crs, so the balance is about INR 3,300 or INR 3,400 crs.
So out of that, how much is the base order, I mean, more regular base orders, excluding the data center and the BESS order?
Venu Nuguri
Most of them are base orders.
We do not have any major large orders this quarter.
We have seen strong order from the data center this quarter.
Parikshit Kandpal
So, the data center would be a larger right?
I mean, INR 400 crs to INR 500 crs
Venu Nuguri
We have received multiple orders in data center not one order.
Parikshit Kandpal
BESS is for the utility customer or is it a C&I customer?
Venu Nuguri
It is a C&I customer.
Parikshit Kandpal
So, your focus will be on the C&I segment, right, not at the utility scale?
Venu Nuguri
No, we will also do for utility customers.
As I said, this is our first project, we need to see how our product will fit to future projects we undertake.
We are not limiting only to C&I.
Parikshit Kandpal
Okay.
Sir, my second question is on this quarter's revenue.
So just wanted to understand, there is a dip in the gross margin.
So, what I understand is that there is a contribution coming in from the 2 HVDCs on the revenue front which reduced the gross profit margin slightly, However, this has been neutralized at the EBITDA level.
So just wanted to understand how much is the contribution of the HVDC project in the revenue in this quarter?
Hitachi Energy India Limited August 07, 2026
Ajay Singh
We do not give the breakup separately on the margins for the respective segments.
Overall, 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 coming out of the different product mix that we are executing.
But again, if you compare from the March year-end closing, we are consistent.
Venu Nuguri
And the first quarter is a soft quarter from various other things standpoint.
Parikshit Kandpal
I do not want the margins.
I just want to understand; how much is the contribution of 2 HVDC projects in revenue during Q1FY27?
Ajay Singh
If you have been following us, we have been telling that 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.
That is what we have been telling.
Hence, the full revenue contribution from the HVDC projects has not yet materialized.
Venu Nuguri
The first project, Khavda project is picking up.
Bhadla project is starting.
Parikshit Kandpal
So, this quarter revenue is from the base order nothing from HVDC revenues?
Venu Nuguri
There is some contribution from the HVDC.
It is not that nothing is there.
Moderator · Conference Operator
Our next question is from the line of Rahul Gajare with Macquarie.
Rahul Gajare
Congratulations on a strong quarter performance.
Sir, I have two questions.
One, how much of the order backlog is coming from the export market?
And if possible, you could give us geographically which markets you are getting the export business?
That is the first question.
And 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-a-vis Korean or Mexican manufacturing.
So, these are the two questions.
Venu Nuguri
On the exports we are trending 25% - 26%.
What was your second question?
Rahul Gajare
Sir, second question is, once your entire capex is done, which you are doing a lot of backward integration, including component manufacturing.
I wanted to understand how Hitachi Energy India will be competitive vis-a-vis Korean players or Mexican players.
So, some qualitative sense, if not quantification is possible.
Venu Nuguri
We are already competing with Mexican, Koreans or everyone in global market.
Our capex is to increase our capacity and of course, localizing some of those components.
I do not see any issue in competing with any of those players.
Our requirement is as long as there is a level playing field, we have no issue with competing anyone.
Rahul Gajare
Actually, what I was trying to get, once you have more backward integration, you are obviously better placed.
Localization will obviously lower your cost.
From that perspective, will you be 10% more cheaper to manufacture compared to what you are today.
That is where I was trying to get to.
Hitachi Energy India Limited August 07, 2026
Venu Nuguri
It is the volume and other things will give us leverage. the whole idea is to localize more components and to create an end-to-end manufacturing scenario over a period in India.
That is our intention of doing this kind of capex.
Moderator · Conference Operator
Our next question comes from the line of Jason Soans with IDBI Capital.
Jason Soans
Congrats on a good set of numbers.
Sir, the first question pertains to how is the HVDC pipeline looking from 6 months to 1-year point of view?
Venu Nuguri
There is an HVDC project, full greenfield HVDC project is already under bidding we expect that should be awarded in 6 months.
Jason Soans
Okay.
Okay.
And sir, also during the quarter, there was some news about government allowing the entry of 4 Chinese players into the market.
They will be more catering to the GIS side and the transformer side and there is a 60% - 65% local content thing also there.
So, wanted to know your understanding of this aspect.
Will it push prices down?
How do you see this thing going ahead?
Venu Nuguri
Our view is clear.
More competition is welcome to meet the demand and supply challenges or perceived demand and supply challenges, if any.
As long as there is a level playing field, we do not see any issue in competing and ensuring that our margin ambition is met in that.
Coming back to the specific question i.e., transformer and GIS.
They were already competing in some form or other form, may not be in same segment, hence, I do not see any material impact for us.
Jason Soans
Okay.
Okay.
TBEA being one of the largest players, do you still feel competition, will not be threat going ahead?
Venu Nuguri
No, we do not see any major threat now.
Moderator · Conference Operator
Our next question comes from the line of Umesh Raut with Nomura.
Umesh Raut
Congrats for an exceptionally good set of numbers.
My first question is pertaining to BESS capability that we have.
If I understand correctly, the scope of work that you can cater to is basically pertaining to, inverters, PCS solutions, then probably integration between cell and grid.
So that is what you can offer.
So how much of this is localized and whether those capacities are currently ready with you?
Venu Nuguri
On the battery energy storage, we approach this segment in two ways.
In one approach, we also supply our PCS solutions, which we are not localized yet.
So that will be supplied to our battery energy storage developers.
And the second one is through our grid integration business.
We will also do the complete battery energy storage solutions end-to-end which will not include the civil work.
In this case, we are doing a complete containerized and scalable solutions, excluding batteries.
We will do complete design, automation, PCS, and grid connection.
It is an end-to-end solution.
Hitachi Energy India Limited August 07, 2026
Umesh Raut
Understood.
So that software to connect to batteries would also be part of this package?
Venu Nuguri
Yes.
Umesh Raut
Understood.
Second question is pertaining to Slide number 10, where you are indicating a downturn in terms of growth for transmission as well as railway and metro in first quarter.
And if I look at your order mix between utility for last year quarter and this year, it is down.
Is it a temporary thing?
Venu Nuguri
It is a temporary thing in the transmission.
I do not see that as any major issue.
Railway projects are progressing slower than originally anticipated.
Based on the discussion with the rail and metro authorities -- we expect it should pick from the second half of the year.
Transmission is just a timing issue.
Umesh Raut
Understood.
Third question is from the data center order that you have received during the quarter.
Any colour about opportunity that you can cater in terms of GW?
And second, there is one large project from Hyderabad from one of the leading MNC company, would this be an exclusive collaboration?
Venu Nuguri
Most of the data center customers are securing the long lead items like dry transformer, the GIS, etcetera.
Our portfolio will be the entire grid integration which includes GIS, the transformers, the dry transformer, the power transformers including the services.
In our portfolio, we have just launched “Grid to rack solution for data centres.” We have shown the same in our investors meet in Mumbai.
We are currently evaluating how best to position and deploy this offering for our customers.
Umesh Raut
Understood.
If I can squeeze one more, just last question, which is on transport side.
On Slide number 5, you have mentioned about a large program related to Kinet Railway Solutions.
So, what is your scope of work here?
And how big ordering opportunity could be from these train sets?
Venu Nuguri
What we talked about Indian Railways, Kinet Railway Solutions to manufacture Vande Bharat sleeper trains.
This is coming up.
Our scope of work is depending upon whether it is the engines or the cross-country electrification.
All our four-business unit portfolio will go into that.
If it is for the locomotives then only traction transformers will go into it.
Umesh Raut
Understood.
Any colour on the quantum side in terms of value opportunity?
Venu Nuguri
No, we do not want to share the segment-wise.
Moderator · Conference Operator
Our next question comes from the line of Sumit Kishore from Axis Capital.
Sumit Kishore
My first question is in relation to your order backlog of INR 32,222.1 crs.
What percentage of this is non-HVDC right now?
And in the non-HVDC order backlog, where are we on the proportion of data center contracts?
And 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?
Hitachi Energy India Limited August 07, 2026
Venu Nuguri
On the order backlog, we do not give specifically how much is HVDC.
We have not given so far.
So, you should please respect that.
We have given enough indications for you to calculate.
What was your second question?
Sumit Kishore
On Data center?
Venu Nuguri
The visibility for data center going forward is strong.
When we talk to data center developers, there is a lot of plans, but the key is there should be support from government for the same.
These projects do not have a long gestation period so if we are talking about 15 GW by 2030, then the project pipeline will be sustainable going forward.
Sumit Kishore
Sure.
My second question is in relation to your business, which is into transformers, you are insulated against commodity price variations given the demand-supply mismatch.
What would you say about the commodity price volatility for the non-transformer part of your business portfolio?
Ajay Singh
Presently, we are not getting any material impact.
60%-65% of our orders are pass through.
In this quarter, there is no commodity impact per se.
Even if there is a small impact, we can manage the same.
Moderator · Conference Operator
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 of Hitachi Energy India for his closing comments.
Over to you, Sir.
Venu Nuguri
Thank you very much.
We are pleased with our strong start to FY27. The business is executing well, market demand remains robust, and our pipeline is stronger than ever.
While we remain mindful of macroeconomic uncertainties 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.
Thank you once again for joining the call.
And if you need any more information, please reach out to Priyanka Bhagat, who leads Investor Relations.
We are happy to engage with you all.
Thank you very much and take care.
Moderator · Conference 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 lines.