Hitachi Energy India Limited announces Q4FY23 and full year results: Consistent order growth, progressive margin recovery

QUARTER HIGHLIGHTS

• Orders hold steady, revenue rises 28% QoQ
• Exports contribution to order growth continues.
• Supply limitations of semiconductors persist.
• Margin and PAT recover from previous quarter

FULL YEAR HIGHLIGHTS

• Orders grow 84.3% YoY over corresponding period
• Order backlog of INR 7,071crore at year-end
• ~45% reduction in carbon emission since launch of Sustainability 2030
• Board recommends dividend of INR 3.40 per share (170%)

Bengaluru, May 24, 2023 – Hitachi Energy India Ltd. announces results for January to March 2023, and for the financial period from April 2022 to March 2023.

* Comparative figures for 12 months since previous financial year was for 15-month period (Jan 01, 2021 to Mar 31, 2022)

**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).

“Our success is a result of our focused strategy, diversified portfolio, and relentless pursuit for improving the bottomline,” said N Venu, Managing Director and Chief Executive Officer, Hitachi Energy India Ltd. “The price of certain commodities specific to our industry remain high and chips & electronics shortage persist. We have resiliently navigated these challenges and remain optimistic about leveraging opportunities arising from the fast-evolving energy transition along with customers and stakeholders,” he added.

Orders

In the quarter ending March 31, 2023, we received orders worth INR 1,262 crore, flat QoQ, driven by utilities, transportation and industries and reflecting energy transition and electrification drive, especially to renewables. Industries, especially, steel and metals, contributed towards orders for High Voltage Products and Transformers as well as embracing digitalization with solutions such as Coresense™, RelCare and MSM. In the transportation segment, electrification of railways, adoption of new age locomotives and metro led to demand for our transformer and substation automation products.

Services and exports have continued to deliver this quarter with orders from metal and steel industries for high voltage products, datacenters, RelCare and RelScan order across wide-ranging companies, automation orders for utilities. During the quarter, exports contributed 19 percent of orders from Middle East, Africa and Japan. Our strategy of making in India for India & the world is coming to fruition with some of our feeder factories recording their highest ever orders in the quarter.

As of March 31, 2023, order backlog stood at INR 7,071 crore providing revenue visibility for the coming quarters.

Revenue

Revenue improved 28 percent QoQ reaching INR 1,336.3 crore for the quarter ended March 31, 2023, on the back of strong order pipeline with greater export contribution. Strategic approach and go-to-market mechanism focusing on high growth segments have helped us execute and deliver solutions tailored around customer demands. Consistent focus on liquidity and cash helped us provision against future headwinds.

Profit

While shortage of chips and electronics continued and inflation loomed, profit before tax quadrupled to INR 65.1 crore and profit after tax was up more than ten-fold to INR 50.8 crore, over a weak previous quarter. A range of measures to drive productivity by streamlining our supply chain, transforming our manufacturing processes and bringing continuous improvement with optimization and digitalization, have helped us reduce cost.

Full Year

For the full year, ending March 31, 2023, orders were INR 6,817.2 crores up 84 percent from the corresponding last twelve months, while revenue stood at INR 4,483.70 crores with 14 percent increase during the same period.

As we entered the year, we met with challenges of rising inflation and continued shortage of chips & electronics, which was curtailing business profitability. We remained optimistic and focused towards increasing operational efficiencies while expanding our portfolio in the high growth markets.

Our acute focus towards building sustainable operations helped us continue our journey towards carbon-neutrality. Our operations across offices and projects sites continue to maintain 100% fossil free electricity consumption. The Company has reduced its CO2 equivalent emissions by more than 45% since the commencement of its journey to carbon neutral.

We have placed sustainability at the heart of our purpose: advancing a sustainable energy future for our partners and customers. Over the last few years, becoming Hitachi Energy, we have unwavering commitment to quality, customer-centricity and innovation which has helped us build relationships with our customers and stakeholder. Our focus on transparency and accountability has further cemented our reputation as a reliable partner and helped us earn the recognition of Most Trusted Brands of India by Marksmen group and the Golden Peacock Award for Corporate Governance by Indian Institute of Directors.

Board changes and outcome
Based on the Company’s performance for the year ended March 31, 2023, the Board of Directors has recommended a final dividend of INR 3.40 paise per share of face value INR 2 each; ie 170 percent, subject to the approval of shareholders at the ensuing Annual General Meeting.

Nishi Vasudeva has resigned as non-executive Independent Director wef May 24, 2023. Meena Ganesh was appointed as an Additional Director in the capacity of non-executive Independent Director for a term of five years with effect from May 24, 2023 to May 23, 2028. She is Chairperson and co-founder at Portea Medical and serves on the board of Pfizer India, P&G Health & Hygiene Limited and Axis Bank. The appointment is subject to approval of shareholders of the Company.

Outlook

Fundamental market drivers remain intact due to the acceleration of the energy transition despite geopolitical tensions and macro economic challenges. This provides medium to long term opportunities for power technologies, especially in our identified high growth segments – renewables, HVDC, data centers, transport, etc. However, in the short term, supply of chips and electronics will only gradually improve with manufacturing capacities clearing out backlog over the coming quarters.

About Hitachi Energy Ltd.

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 40,000 people in 90 countries and generate business volumes of approximately $10 billion USD.

In India Hitachi Energy operates under the legal entity name Hitachi Energy India Limited (formerly known as 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.

https://www.hitachienergy.com
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About Hitachi, Ltd.

Hitachi drives Social Innovation Business, creating a sustainable society with data and technology. We will solve customers' and society's challenges with Lumada solutions leveraging IT, OT (Operational Technology) and products, under the business structure of Digital Systems & Services, Green Energy & Mobility, Connective Industries and Automotive Systems. Driven by green, digital, and innovation, we aim for growth through collaboration with our customers. The company’s consolidated revenues for fiscal year 2021 (ended March 31, 2022) totaled 10,264.6 billion yen ($84,136 million USD), with 853 consolidated subsidiaries and approximately 370,000 employees worldwide. For more information on Hitachi, please visit the company's website at https://www.hitachi.com.

Media Contact:

Manashwi Banerjee
Head of Communications
Hitachi Energy India Ltd
+91 72597 66881

[email protected]