Hitachi Energy India: Marching on in high-growth segments

• Transport and industry spur growth; orders up 10.0% Year on Year
• Revenue impacted by global supply chain logjams
• Net profit jump 614.6% YoY year-on-year on base effect

Hitachi Energy India (listed on the Indian stock exchanges as “ABB Power Products and Systems India Limited”) announced its third-quarter results for 2021.

(INR crore)

**The company evaluates the profitability based on Operational EBITA. Operational EBITA represents income from operations excluding: (i) amortization expense on intangibles, (ii) restructuring and restructuring-related expenses, (iii) non-operational pension cost, (iv) gains and losses from sale of businesses, acquisition-related expenses and certain non-operational items, as well as (v) foreign exchange/commodity timing differences in income from operations consisting of: (a) unrealized gains and losses on derivatives (foreign exchange, commodities, embedded derivatives), (b) unrealized foreign exchange movements on receivables/payables (and related assets/liabilities). 

“While green shoots of economic revival are starting to become more visible, we remain watchful of potential risks from Covid-19 and other avenues,” he added.

Orders

In the September quarter, we received orders worth INR 979.0 crore, up 10.0 percent YoY, driven by the transport sector and industry. A considerable chunk also pertained to orders in the renewable energy sphere, with solar and hydro projects generating significant demand for our high voltage and grid integration products. Transformers drew strong interest from rail and metro companies alongside top utilities to cater to rising power demand.

Our service portfolio continued to deliver as we booked our first RelCare remote asset management order for a 750 MW solar photovoltaic plant in Rajasthan, and grid automation and cybersecurity orders for power stations, metals and petrochemical companies. Our consultancy business attracted companies in power, aviation, textile, manufacturing and specialty intermediates for system studies.

Exports remained healthy, contributing more than 18 percent to the order book in the September quarter. We received breakthrough high-voltage orders from key utilities in Latin America and Eastern Africa as well as an order for our power system studies from an FMCG company in South Asia.

As of 30 September 2021, our order backlog stood at INR 4,896.5 crore, which will unlock revenue streams in the coming months.

Revenue and Operations

Revenue at INR 850.6 crore was 10.1 percent lower year-on-year because of supply chain disturbances, caused by containers being stuck at ports and material shortages. However, spurred by our steady focus on high-growth segments and relentless execution, revenue was seen normalizing to pre-Covid levels.

The health and safety of our people remained our top priority as well as our efforts to advance a sustainable energy future for all. During the quarter we proactively constituted an Environmental, Social and Governance (ESG) Committee of Directors during the quarter to track our performance. We also made notable headway in decarbonizing our operations – switching one of our factories to 100 percent green electricity, we partnered with premier institute IIT Roorkee on smart and sustainable campus energy ecosystem, and finalized training programs in power management with key utilities to build back better.

Profit

Profit before tax was INR 47.2 crore. Profit after tax was up 614.6 percent year-on-year to INR 34.3 crore primarily because of a low base of 2020 and our unwavering efforts at stabilizing our supply chains and improving other efficiencies. Operational EBITA stood at INR 55.6 crore in the September quarter, with EBITA margin at 6.5 percent.

About Hitachi Energy

Hitachi Energy is a global technology leader that is advancing a sustainable energy future for all. We serve customers in the utility, industry and infrastructure sectors with innovative solutions and services across the value chain. Together with customers and partners, we pioneer technologies and enable the digital transformation required to accelerate the energy transition towards a carbon-neutral future. We are advancing the world’s energy system to become more sustainable, flexible and secure whilst balancing social, environmental and economic value. Hitachi Energy has a proven track record and unparalleled installed base in more than 140 countries. Headquartered in Switzerland, we employ around 38,000 people in 90 countries and generate business volumes of approximately $10 billion USD.

Hitachi Energy in India operates under the legal entity name ABB Power Products and Systems India Limited and is listed on the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) as POWERINDIA, Scrip code 543187. ABB Power Products and Systems India Limited is in the process of changing its name to Hitachi Energy India Limited.