Hitachi Energy India Ltd. reports strong financial performance despite supply-side challenges in the quarter ended March 31, 2022

QUARTER HIGHLIGHTS

• Orders up 23% YoY
• Revenue rises 11% YoY
• PAT grows 31% YoY

FULL YEAR HIGHLIGHTS

• Robust export performance - 24% of total orders
• Solid order backlog of INR 4,672.3 crore at year-end
• 100% fossil free electricity in operations
• Board recommends dividend of INR 3 per share (150%)

Hitachi Energy India Ltd. announces results for January to March 2022 and for the financial period from January 2021 to March 2022.

“The continued shift from fossil fuels to electrification by India’s industrial sector towards a carbon-neutral future is encouraging and we also experienced solid demand from transmission utilities and industries,” said N Venu, Managing Director and Chief Executive Officer, Hitachi Energy India Ltd.

“The government’s climate conscious budget supports the focus on technologies that will help to accelerate the energy transition. While supply chain constraints and commodities pose short-term challenges, our long-term growth prospects remain intact,” he added.

Orders

In the quarter ending 31 March, we received orders worth INR 1,043.6 crore, up 22.9 percent YoY, driven across sectors – utilities and industries. The Company won major orders from public and private companies to strengthen state grids, integrate renewables and support digitalization. Industries, especially, steel and oil and gas, contributed towards orders for traditional power quality solutions, as well as evolving opportunities like digital substation enhancements. The continuing electrification of India’s railways generated demand for trackside power equipment.

In Services, industries such as steel drove orders, from expanding their power infrastructure to lifecycle services – remote and on-site. The consultancy part of the business supported renewable and BESS studies from India and around the world, as well as technical customer training activities.

From North America to Malaysia, increasing global demand for power quality technologies and grid integration projects helped to boost the order book with Exports contributing to over 24 percent of orders in the quarter.

As of March 31, 2022, the order backlog stood at INR 4,672.3 crore, which is expected to result in sustained revenue in the coming months.

Revenue

Revenue rose 11 percent YoY reaching INR 1,142 crore for the quarter ended March 31, 2022, as the company executed and delivered on domestic and global orders. Despite the ensuing third wave of Covid-19 at the start of the year, the Company executed utility projects to help prepare for high demand summer months.

The Company also completed a transformer digitalization pilot (using CoreTec®, CoreSense™ and e-devices), with add-on solutions to upgrade all makes of transformers. As off-shore wind generation develops as a critical lever in the energy transition, the company introduced OceaniQ™ – innovative offshore portfolio of products, solutions, and services for reducing costs, increasing safety and improving efficiency for the offshore segment.

Operations

The quarter witnessed COVID-19-led restrictions in January, persistent semiconductor shortages and high commodity and raw material prices, resulting in margin pressure across the industry. However, the company remained selective on contracts, revisited long-term agreements with customers and suppliers and through intense collection efforts improved cash performance.

Supporting the vision of advancing a sustainable energy future for all, a Smart Electric Grid Lab was inaugurated to develop future talent at NIT Warangal. Our technologies and projects that are helping to accelerate the energy transition were recognized by India Smart Grid Forum (a public private partnership initiative of Ministry of Power, Government of India) in their Innovation Awards.

Profit

Profit before tax was INR 70.7 crore, up 31.7 percent YoY, despite high commodity and other supply challenges. Profit after tax was up 31.2 percent YoY to INR 51.7 crore. Through continued focus on efficiencies, Operational EBITA stood at INR 77.1 crore in the quarter.

Board outcome

Based on the Company’s performance and encouraging market outlook, the Board of Directors recommended a dividend of INR 3 per share (150 percent), subject to the approval of members at the forthcoming Annual General Meeting.

Following the recommendation of the Nomination and Remuneration Committee, the Board of Directors, at its meeting held today, reappointed Mr. N Venu as Managing Director and CEO of the Company for a further period of five years commencing December 2, 2022. They also reappointed the independent directors – Akila Krishnakumar, Nishi Vasudeva and Mukesh Butani – for a second term of five years commencing December 24, 2022. The re-appointments are subject to the approval of the Shareholders.