Ladies and gentlemen, good day, and welcome to GE T&D India Limited Quarter Four and Year Ended March 2024 earnings 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. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Megha Gupta from GE T&D India Limited. Thank you, and over to you, Ms. Gupta.
Good evening, everyone. A very warm welcome to the GE T&D India Limited earnings call for the fourth quarter and financial year ended March 2024. I'm Megha Gupta from GE T&D India Finance and Investor Relationship Team. Today, we have with us Mr. Sandeep Zanzaria, CEO and MD of the company, Mr. Sushil Kumar, Full-Time Director and CFO of the company, Mr. Abhishek Srivastava, Head Business Operations, Ms. Kanika Arora, Communications Leader, Ms. Anupriya Garg, Company Secretary of the company. During this call, we will discuss company's financial performance, including operational highlights. We'll share key updates. We'll address any questions that you may have. Before we begin the call, I would like to highlight few important notes for today's call. Firstly, we have just declared results for the fourth quarter and financial year 2024. The said results are now available on our company's website.
Further, we have also prepared analyst presentation for the quarter, which will be discussed during the call. Also, I would like to remind everyone that today's discussion may contain few forward-looking statements, which are subject to risk and uncertainties. These statements are based on our current expectations, and actual results may vary materially from those expressed or implied. We encourage you to refer to our public filings and disclosures for a comprehensive understanding of the factors that could impact our future performance. Towards the end of the presentation, we'll be having a dedicated question and answer session. Thank you once again for joining us today. We appreciate your continued support and trust in GE T&D India Limited. Now, I'll now hand over call to Sandeep for his opening remarks.
Thank you, Megha. Good evening, everybody. Appreciate you taking time to join us for today's call and continued interest in GE T&D. So I'd like to begin by sharing that we are incredibly proud and excited that GE Vernova is now an independent company, having completed our global spin-off. This significant moment builds on more than 150 years of industry leadership and signals a tremendous opportunity to collectively accelerate the energy transition. GE Vernova is perfectly built to meet this challenge with its product and services designed to generate, transfer, orchestrate, convert, and store electricity in order to create a more reliable and sustainable electrical power system. GE Vernova's electrification business, except GE T&D 's power, electrifies the world with advanced grid technologies and systems, enabling power transmission and distribution across the power grids and supporting a decarbonized and secured energy transition.
India is poised to witness the fastest growth in electricity demand among major economies, according to the International Energy Agency report. The Indian power transmission segment has grown significantly over the years to cater to this rise in generation capacity and power demand, making the country's electricity grid as one of the largest synchronized grids in the world. The big growth driver is the need for grid stability and flexibility in use of renewables. Reinforcing, modernizing, and automating the grid with right equipment and energy storage, power flow control, reactive power equipment is mission critical to maintain the stability. GE T&D is a major player in the transmission sector in India, and we are totally geared up to exploit the expanding demand that is generated through energy transition and digitization. One of the other key growth driver for us will be India's data center market.
That is one of the most dynamic markets in the world and is witnessing several new investments from local and global operators. With this background and rising demand in global and Indian market, we are excited to share a continued surge in our order book in Q4, which saw a booking of INR 13.3 billion, up by 53% year-on-year, compared to INR 8.7 billion in the quarter ended March 2023. Few of the key orders that we received were from Power Grid with the State Transmission Asset Management Centre for Odisha, the supply of GIS for data centers in Maharashtra and Andhra Pradesh. For FY 2023-2024, our order booking was INR 57.9 billion, compared to INR 27.4 billion, up by 112% year-on-year.
This strong order pipeline helped us to improve our order backlog to INR 62.7 billion, as against INR 57 billion of last year, an impressive increase of 70%. Our Q4 revenue stood at INR 9.1 billion, which was INR 7 billion in the Q4 FY 2022-2023, up by 30%. This also included a notable increase in our profits. On a FY basis, our 2023-2024 revenue stood at INR 31.7 billion, rather than INR 27.7 billion, up by 13%....Our profit before tax and exceptional items was at INR 1 billion compared to INR 43 million in the corresponding quarter of the previous financial year. From an FY 2023-2024 perspective, profit before tax stood at INR 2.63 billion versus INR 381 million in FY 2022-2023, which is an increase of 23x .
This improvement in profitability and balance sheet paved the way for the company becoming debt free. The cash and cash equivalent balance stood at INR 2,765 million as of March 31st, 2024, versus INR 1,573 million as on December 31st, 2023, our previous quarter, and a net debt of INR 1,730 million as on March 31st, 2023. The cash generated for the Q4 was INR 1.19 billion, and for the year was INR 4.5 billion for FY 2023-2024. We are also pleased to inform to our shareholders that the board has recommended a dividend of INR 2 per share after a gap of five years, which is subject to shareholders' approval. We remain committed to develop top-notch technology that allow us to secure trust from our customers.
From Power Grid, we developed 2 GW bipolar DC systems, STATCOM solutions, full range of grid stabilization solutions. We offer AIS, GIS switchgears contributing to the standards of the grid industry. Utilities are moving away from viewing the grid as something that they operate with manual operations to a much more modern architecture that gives them the ability to see the entire grid and orchestrate for variabilities. With this critical demand driver, we see a robust addressable market for our energy-focused software business, especially for Grid Software, which is highly differentiated offering and the first of its kind. Lastly, we continue to focus on deploying our Lean Operating System to reduce lead times, reduce our cost, and expand our production output.
In the coming years, the nation's commitment to achieve 50% of its total electricity generation capacity from non-fossil sources by 2030 will necessitate substantial investment in both interstate and intrastate transmission network. With ongoing investment in grid modernization, capacity expansion, and integration of technology, the future outlook of the country's transmission segment is promising. These initiatives will not only enhance grid reliability, but will also support the government's ambitious goal of increasing renewable energy capacity and reducing carbon emissions. We could not be more excited about the path ahead, and we thank you for your continued support. I now invite Abhishek to talk about the operational...
Thanks, thanks, Sandeep. Good evening, everyone. I will just quickly take you through the key operational highlights for GE T&D India. In quarter four of the financial year 2023, 2024, we partnered in development of the transmission network of our country, and in this, two key milestones were achieved. One was the commissioning of Koppal phase II, which is the first TBCB project for our customer, ReNew, and this is the largest interstate grid connection for southern part of India. Another key milestone was commissioning of 220 kV GIS for Adani Kutch Copper Limited, and this was again a great sense of satisfaction for us in terms of participating in setup of one of the largest single point copper manufacturing facility, and this project was done in a record time.
So these are two key highlights, and I hand over to Sushil to take us forward.
Thanks, Abhishek, and good evening, everyone. Talking about the financial performance and first, highlighting the orders achievement. So this financial year, we booked INR 57.9 billion of orders. This was 112% more than the orders that we booked in the last financial year. During the quarter, we achieved INR 13.3 billion of orders, which is 53% higher than corresponding quarter in the last year. If you look at the investor presentation, it's important to note that every quarter in this financial year, the order booking numbers are significantly higher than what we achieved in the corresponding quarters of the last financial year. The orders that we achieved are basically coming from different set of customers. This includes the central PSUs, state utilities, developers, EPC companies, and so on.
And also we have made a significant improvement in the export orders during the year. In terms of the financial performance, this quarter, we achieved INR 9.1 billion of revenue, about 30% higher than corresponding quarter in the last year. Whereas on a full year basis, we achieved a revenue of INR 31.6 billion, about 14% increase versus the last financial year. However, a very important improvement is in the EBITDA level, where we have about 12.8% EBITDA for the quarter, a significant 8.3 points improvement, versus the corresponding quarter in the last year. And on an overall basis, EBITDA for the financial year was 10.8%, about which represents about 5.9 points increase, versus the corresponding last financial year.
Similarly, like we have a significant improvement in the EBITDA, and we have, since we have become debt free and we do not incur the financial charges as in the earlier financial year. The performance or improvement in the profits before accounting exceptional items and profit after tax is higher than what we see in the EBITDA level, the details of which are already given in the presentation. In terms of some of the highlights as highlighted in page eight of the investor presentation, with respect to the state of order book and revenue between export and domestic segment. So overall, for the financial year, we, the overall INR 57 billion orders that we booked, 68% of the orders were from domestic market and about 32% orders from the export market.
On the revenue front, on the entire financial year, out of total INR 36 billion of revenue, 69% of the revenue is from the domestic market, and about 31% of revenue is from the export side. End of the financial year, we have about the backlog of INR 62 billion, which has basically 62% coming from the private customers. State utilities have about 10% share, and about central utilities have about 27% of the backlog or orders we have with us. So with that, we can now open up for the questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mohit Kumar from ICICI Securities Limited. Please go ahead.
Good evening, sir. Congratulations on the good quarter and consistent improvement in margins. My first question is on the ordering flow. Of course, last year was tremendous, but as we go forward, how do you see the next 12 months from ordering point of view, given the sharp bidding activity in the interstate transmission system?
So, hi, Mohit. Yeah, thank you for the question. Yeah, we look at this, the momentum which has been built in the past year in terms of order intake. We expect the momentum to be there, and we are looking at closely monitoring the situation because we see a number of transmission projects which are under finalization now, where the river options and things are happening. So yeah, we are looking at a sustained 2024, 2025 as well.
My second question is, I believe that we do not have any STATCOMs under installation in India. Are we in the process of indigenizing the STATCOM and start looking at this opportunity in future?
So, yeah, you are right, Mohit, that today we don't have a STATCOM order, which we are executing in India. But definitely, globally, we have a portfolio of STATCOM. Recently, there was an announcement of GS won STATCOM in Taiwan as well. So yes, we are closely watching this market, and then we are engaged with few customers as well. So yeah, we will be present in this segment as well.
But can you, can you execute right now? I think it will take... You can't execute now. If, if any order is available, you can't take it now. Is that a fair assessment?
We can take and execute.
Okay, understood, sir. My third question, sir, given that there is a large three, four HVDC lines which are about to be tendered in the next, from starting from next couple of months to the Ladakh, is it fair to assume that we can execute at least two of them at one instance, or do you think that the opportunity is too large, and we can only do one?
I will not be able to comment on that, whether we will be able to do one, three, four. But yes, we are a global player of HVDC, and definitely India remains a very important market for HVDC. So yes, we are committed to Indian HVDC market.
Understood, sir. Thank you, and all the best, sir. Thank you.
Thank you, Mohit.
Thank you. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Yes, sir. Hi, hi, Sandeep. Congratulations on a great quarter and the year, sir. So my first question is on the order bookings from the parents. If I remember correctly, last year, last call, we had said that total exports of INR 1,600 crore, INR 1,200 crore was related party orders. So now, and we had taken approvals of almost 2,800,000 earlier, and then later on, we followed up with another INR 1,800 crore of orders. So just wanted to understand from the ordering point of view, what has been closed out of the new INR 2,800 crore of RPT approvals we have taken in this financial year, and how much of these orders are expected to come in in the fiscal 2025?
Basically, you know, when we talk about the export segment, and this time, as I mentioned, we have done about INR 18 billion of orders from the export segment out of the total INR 57 billion of order bookings. And you rightly mentioned that almost 75% of these are coming from the—sorry, 65%-75% are coming from the related parties or the group entities. In terms of the subsequent approval that we have taken, as a related party, those contracts are still under discussion and negotiation, and the related parties or the other group companies are participating in further tenders with the third parties. If they win, and we are able to negotiate with the related parties, we expect to have a momentum in the first half of this financial year.
Okay. Again, second thing is that we have seen our parent's, the GE Vernova electrification equipment business, the order backlog has been growing, like from CY 2021 of $5 billion, now it is almost at $13 billion at the end of CY 2023, and I think at the end of 1Q, it's CY 2024, it's already $18 billion. So do you think that this trend of, related party transactions, on the order booking side, will we see continuous uptrend on this, at least in the near term, given under investments in capacity building, globally?
So, the market is strong globally as well as in India. And, wherever we get the opportunity, we continue to focus on that and, convert that opportunity into order. As and when we get further opportunities from the group party, we definitely would like to have more and more orders from the related parties as well.
Okay. And sir, will these orders be at a better margin? I mean, given, I mean, you have mentioned in the past that export orders do have better margins. So when we take, now these export orders are sizable from the current point of view at 65%, which you highlighted 65%-70%. But are these margin dilutive to the India business or will they have similar or better margins?
Yes, generally, the export orders margin are better than the margins that we get in the India business historically. But, India market, the pricing is also improving and the margins are also becoming better too. So depending on the deal or the business line, some get, better margin at the India level as well.
Okay. And this is the last question, sir. On this HVDC side, so I mean, recently, as in virtual on today's call said that they have entered in a joint venture with the international companies. Is it GE, or, if not, then whether are we looking at tying up or, for HVDC in a joint venture or directly bidding for these orders?
Parikshit, we will not be able to confirm or deny anything because these are all individual strategies in the market. So sorry.
Okay. But we are open to directly bidding also, sir? I mean, are we open to both the options, I mean, looking at the joint venture with anyone else or also directly bidding, so, without naming anyone?
I will not comment on that, whether we are bidding in consortium or whether we are bidding alone, but, yes, we are very serious, and we will be an important player in HVDC in India.
Okay. And just, Sushil, just one thing, on this tax, sir, there is a high outgoing tax with, I mean, this quarter especially, I mean, the tax rate is highest. Is there any one-off? I think you have taken some right, reversal tax provisioning for previous years. If you can help us clarify why the tax rate is so high in this quarter.
Yeah, so as you see the profit and loss statement that we published in stock exchange, we have already classified, INR 85 million of tax related to the earlier year as a separate line item. So that's a one-off item.
What is the reason behind it, sir? I just wondered. I've read that note, but what was this pertaining to? I mean, was there any assessment or anything?
Yes, it's pertaining to the, let's say, review of the available tax balances and the probability of getting those from the tax authorities. This is the internal as well as external opinion that we have taken. But I can confirm that this is a one-off item in the PNL.
Okay, sir. Okay, sir. Thank you, sir, and wish you the best. Those are my questions.
Thank you, Parikshit.
Thank you. The next question is from the line of Renu Baid from IIFL Securities. Please go ahead.
Yeah. Hi, good evening, team, and congratulations for a very strong performance. So my first question is just to understand on a broad basis, now that you mentioned, Vernova was a separately spin off entity, does it have any material implication on the way the operations have been run at GE T&D India, or any strategic decisions for the India entity, or, business remains the way it was there, until last quarter or so?
So I think operationally and strategically, at least, I can say that the business remains as it is. But the advantage of, for example, sir, when it was a very larger GE, but today, when it becomes Vernova, we are a very energy-focused company.
Mm-hmm.
So definitely the time, probably because we are just very new, like second of April, we became Vernova, and today we are in May. But I think with lot of other businesses of Vernova, we will now be looking at more operational, you know, how to integrate and try to address more market, markets. That will be a strategy which we will be exploring in due time.
Got it. Secondly, from an order book perspective, I know it's commented earlier, but if you see it's the highest inflows in the past decade that the India entity has secured, and order backlog also in absolute levels is back to 2019 levels. So X of the, HVDC export order, which you mentioned, was a longer gestation cycle project. What would be the average execution of the current backlog that we have, excluding the HVDC export?
Well, so depending on the product that we sell, it ranges from 12 months-24 months. Yeah.
Got it. Okay. And on this backlog also, especially the last six months, at least domestic market has been extremely favorable for the equipment vendors, and pricing has seen material improvement.... So you think the gross margin that you were able to report in fiscal 2025, 35%, which was a reasonably healthy level, that should be maintainable? Or you believe there could be some headroom for improvement from further on from these levels as well, given that business is still product heavy compared to projects?
I'll say here that business is, as a strategy, we are more product heavy than the project.
Okay.
So this is one change in strategy, what we have done, and we have been telling in the various investor calls that this is the strategy that we wanted. And, yes, definitely, the whole organization works for the improvement of margin. It is not that at whatever we have won, it's something that we are happy with it. So through lean, through sourcing savings, through risk mitigation, all the levers are put into place, to improve the margins. So I think, we are, we are pretty confident that, yes, we should be able to do a much better 2025.
Thank you. And related to this, one more question lastly on this side. In the last conference call, we did highlight that potentially the India entity could win another INR 1,000 crore kind of order from the group for HVDC exports, and we were expecting it somewhere around April, May. So is that order very well on the cards and could be expected in the near term? Or it would be again subject to certain wins from the parent group entity?
So then I answer this question, then Parikshit , ask the same question. First of all, we didn't declare this as a clarification that it's an HVDC order.
Okay.
It's various products that we manufacture in our factories. The second part, as I mentioned, is subject to the risk of renewable energy or the basic contract from the customer, as well as internal income by EBIT only from the group entity, because we are not the only one who manufacture this product.
Correct.
But we're working seriously on products, and we are basically trying our best to get more orders in the export market as we are doing. So between both as well as the export market to increase our order book and utilize maximum capacity of the plants that we have.
Sure. So the strategic-
Timeline, sorry, just to add on, the timeline remains same, that in the first half of this financial year, we'll have the outcome of this decision.
Got it. But strategically, if we see, which other product lines, within our fold, you think, may have a higher chance of winning fresh mandates from the parent, apart from HVDC range, given that globally, the value chain and supply chain for a lot of power grid equipments are stretched. And in addition to the product lines, which markets, which new markets in your view, may open up for India, the way the Korean markets have opened up recently through the parent entity? That is the last question from my side.
So, Renu, here I think, one of the things is that, yes, definitely the markets are opening up because, you know, the energy transition story is very strong in many geographies.
Mm-hmm.
So we are getting unexpected, newer markets which are there, and definitely, we are looking eagerly towards the outcomes of these divisions which are there, which is, you know, coming with the end customers. That is on the second, it is... So when we talk about HVDC, it is not only the transformers, but, as Sushil said, that we have never said that these are only like HVDC opportunities, which are, it could be normal substation product, opportunities as well. So, and for a product different, like the AIS, GIS, there is a good amount of localization done in the country itself.
Mm-hmm.
We are not so heavily dependent on the outside supply chain. Definitely, there will be few critical components which are-
Mm-hmm.
going to come from the offshore vendor, but then a large part of those supply chains are also localized. So which makes the challenge bit less. I would not say that it's a totally like a zero challenge, but it really reduces the challenge in terms of the supply chain as well for the other products.
Got it. Got it. Thank you so much, and best wishes, sir. Thank you.
Thank you.
Thank you. The next question is from the line of Moksha from Agility Advisors. Please go ahead.
Hello.
Hi, Moksha.
Am I audible?
Yes.
Yeah, thank you for the opportunity. So I wanted some clarity on the STATCOM part. How big is this opportunity for STATCOM in India?
So we are looking at about, close to in next two to three years, we are looking at about 15-20 STATCOMs to be put in India. And individually, I think one project could be some-- it depends upon rating, because, the ratings of STATCOM are different, so that's why the total compensation will be totally different. But, each STATCOM project can rate, range somewhere between INR 200 crore, INR 250 crore... Sorry, INR 250 crore to about INR 500 crore.
Okay. I would ask a few more questions on the STATCOM, basically. So where is this required in the entire value chain? Where is it placed in the entire power value chain?
So basically, these STATCOMs are installed wherever we have variations from a renewable sources. So in the transmission network, these STATCOMs are being installed.
... So are these going to be installed in the new transmission lines for the renewable energy, or will these be replaced?
No, they will be new. So for example, the new substations which are coming under TBCB, so they are-
Okay.
At the exit substations, along with the substation, the STATCOMs are being installed.
Okay. So these are basically installed with the substations?
Right.
In the transmission as well as distribution, or just the transmission substations?
Only transmission.
Okay. And how was this requirement of STATCOM fulfilled earlier in India?
When the generation was lower from the renewable sources, anyway, reactive power compensation was not needed to this level. So earlier, the sources were mostly fossil fuel, thermal power generation and hydro. There you don't need these STATCOMs for compensation to this level. With the renewable power coming into play, now the requirement of reactive energy has gone up, so you need dynamic devices, such like, STATCOM, to enable that flow of energy. So this is something which is because of new current in growth of the renewable generation.
Okay. So, is it just, like the STATCOM that are getting installed, is it, there's a mandate or something that has to be made, or it's just a requirement?
This is a mandate which is coming from the grid operators as well, that along with the substation, you need to put the STATCOM.
So are there any alternatives for the same currently which are being used or which can be replaced?
So yeah, there are other technologies which are there globally, but in India, no, the STATCOM is the preferred technology.
Okay. Thank you so much for these. These are my questions.
Thank you, Moksha.
Thank you. The next question is from the line of Jonas Bhutta from Aditya Birla Sun Life Mutual Fund. Please go ahead.
Good evening, gentlemen, and thank you for the opportunity, and congratulations on a great set of results. A couple of questions, Sandeep. Basically, you know, while we appreciate that the shade of the business has become product heavy in the last few years, what would be the broad breakup of sales between products and projects as we speak?
Give me a minute to get the information.
If I can just carry on, so, you know, while you get that data, additionally, I just wanted to understand if at all we were to sort of split the project side, would transformers and switchgears be the two major key products within that subset?
Normally, switchgear is a part of the projects which we deliver, but transformers are not part of the projects normally we deliver, because today all the, whether it is utility private customers, they buy transformers reactors separately and projects separately.
Understood. And what would be our nameplate capacity for transformers after we exited many? As a-
That's what I say, that, you know, transformer capacity, I will not say that. So what happens is that, how many—what complexity of transformers we manufacture, it depends. Suppose, for example, maybe an HVDC transformer, when you manufacture, maybe it might be a 300 MVA, but the cost of that 300 MVA transformer would be like for a normal 765 kV, it would be about three times of that cost. So MVA is not a, basically a, of course, it's a very high level reference which is there, but actual reference is that what kind of rating and how many transformers and reactors combination, including HVDC, including, for example, STATCOM. So it all depends upon complexity and the different, for example, a three-phase 500 MVA, single-phase 500 MVA, is very different.
So that's why we say that we don't want to measure ourselves in terms of MVA capacity.
And
Like, I would have assumed that it would be 18,000 MVAs-20,000 MVAs. Is that a ballpark range where we are on an installed capacity basis?
Yes, I would say that's a fair guess.
Okay, you know, you know, what I was trying to triangulate to was that, at some point in time, I think a couple of years back, you mentioned that, you know, as an entity, as we move to products, we would do peak revenues of anywhere close to INR 40 billion-INR 45 billion. You know, we are at about INR 31 billion. Given the shade of the order book, and the sales mix, which is HVDC heavy and progressively will get HVDC heavier, you think that two years, three years out, you know, that number could be breached just because from a sales mix perspective?
I think this will be, Jonas, will be a forward-looking statement, and we would, like not to comment on this.
The second question, you know. I'll, you know, do you want to give the break-up of the project versus product, or can I proceed to my second question?
Yes, Jonas. Jonas, I have the information. Previously we have about 30% of the total INR 31 billion revenue that we gave in the last financial year, and rest 70% is from the product services under the business line.
Understood. The second question, and I'm going to harp on the HVDC bit, is from a competitive positioning, if you see one of your MNC peers has tied up with a local player, and, you know, combined, they would probably have a 50,000+ MVA capacity to sort of cater to for an HVDC project. While we on a standalone basis, along with the parent, who's already choked with orders, is in fact reverse outsourcing to us. Does that put GE T&D at any disadvantage from just the sheer timelines that it can deliver a particular project, be it the early stage projects of Fatehpur-Bhadla and Khavda-Nagpur?
You know, we may have open capacity maybe for Leh-Ladakh and Khavda-Urad, but at least in the first two projects, do you believe that you are at a disadvantage in that sense?
So I will not say that we are at a disadvantage because, at the end of the day, you know, normally... So if you would have seen our path, so normally we are not trying to build a further risk into the company. So we will be attempting, and we will be targeting projects which are within our capacity zone. But I will not be able to comment today that whether we are at a disadvantage or whether we are at an advantageous position, because HVDC is not only transformer capacity, but there are a lot of other factors also included in an HVDC project, which include the global loading factors and other factors as well, also the amount of localization. And so there are a lot of factors which are involved into, an HVDC, I would say, pricing and things like that.
On the competitive side, it will be very difficult to comment, Jonas.
Sure. Just last quick one: Fatehpur-Bhadla, since the bids have been put in, what is the execution timeline as per the bid, as in tender? Sorry.
It is 48 months for the first 3,000 MW and 54 months for the next 3,000 MW.
Understood. Thank you, and all the very best to the team.
Thank you, Jonas.
Thank you. The next question is from the line of Prathamesh Salunke from PL Capital. Please go ahead.
Hello. Good evening, everyone. Thank you for taking my question. So I had a question on the capacity side, again. So saying we had, like, 18,000 MVA-20,000 MVA variable capacity, just wanted to know, are there any capacity expansion plans in the books right now?
So, Prathamesh, thank you for the call. So this is not I said that it is 18,000-20,000 , but Jonas used that, we are 18,000-20,000 . So we have a very, you know, globally, we have been following GE Vernova. There is a very strong culture of lean, lean implementation, and through which we keep on working on how to, expand the capacity through debottlenecking and through improvement of process flows and things like that. So we keep on working on those things, and, we also keep identifying that what are the bottlenecks and then trying to see how they can be addressed to expand the capacity.
Okay. Right. I understand. So, sir, just wanted to know, is there any capital expenditure plans? Or not capacity expansion, but anything else.
So if that will be there, then, we will be anyhow declaring that, officially to all our shareholders at the same time. So there is... It is not, we would not like to comment anything on an industry call on this subject.
Sure, sir, I understand. So the last question is, is there a possibility to give me, execution, percentage right now for the Vadodara plant to be decided?
Excuse me, can you repeat the question?
So, I wanted to, I wanted to know the capacity utilization for specifically Vadodara plant. Because if I'm not wrong, all the transformers come from our Vadodara plant. So yeah, I wanted to know the,
I would say there that it is pretty occupied, but it is very difficult to comment in terms of whether, like, it is 92%, 72% or 62%. So, you know, there are a lot of operational efficiencies which we measure, but from a market perspective, it is very difficult to comment on such numbers.
Okay, so it's, it's pretty high, basically, more than 90%, would you say?
No, that I will not say.
Ah, okay. Got it. Yeah. Thank you so much for taking my question.
Thank you. Just a reminder to all the participants, if you have any questions, you may press star and one now. The next question is from the line of Inderjeet Singh Bhatia from HDFC Securities. Please go ahead.
Yeah. Thanks, gentlemen, for the opportunity. A few questions from my side. First is, you mentioned projects being 30% of the order book right now. What was the corresponding number at the start of the last financial year?
Mr. Inderjeet, the question was, how much of the revenue comes from the project business in the last financial year? So it was revenue, a number of 30, not the order book number of 30.
But the order book mix is similar now, 30/70?
It will be lower. I don't have the exact number, but it should be lower.
... Okay, second is on the, on the revenue side. I recollect in quarter four, I think quarter three call, you talked about, is starting to accelerate from quarter. Still on track?
I'm so sorry, Mr. Bhatia, we are losing you in between. May we request you use the handset in case if you're using the speaker?
Sure, sure. Is it better now?
Much better, sir.
Yeah.
Please go ahead.
Okay.
Can you repeat the question once again? Yes.
Yeah, I was saying that in, I think, quarter three call, you had talked about revenues catching up with your very, very strong order book growth from quarter one onwards. Is that still on track? Because last year we've done 14% revenue growth, while order book growth is very, very significantly compared to that.
I'll answer it differently. I think year-on-year comparison of 14% is one dimension to look at this number. But the other dimension is to also look at from the last year same quarter, wherein we have delivered 30%.
Okay.
And if you look at the last few quarters, then every quarter we are delivering higher revenue than in the past. So of course, we have a $62 billion or sorry, INR 60 billion of order backlog, which has a specific execution timeline as per the customer contract. And in the earlier question, we explained also the timeline, which ranges from, let's say, 12 months-24 months. So if it's a customer contract, we will definitely be executing, and hopefully we should be working to increase our revenue as much as possible as per the contract timeline.
Got it. One question on the cost structure. So if I look at on a quarterly run rate, your, the staff cost and your other operating expenses is roughly around INR 200-odd crores. What part of this is fixed, cost, and how much is variable out of that?
Um-
I'm assuming staff is definitely fully fixed, and
Sorry, go ahead please.
Staff would be fixed, I'm assuming, and then, other operating expenses would have a mix of that. Can you share any color on the breakup between fixed and variable?
On the other end, I don't have a very breakdown, but we can, on a very high level, talk about 50/50 ratio.
Got it.
Okay.
How are we on a manpower-wise? How are we staffed right now? Do we need to kind of ramp up recruitment very significantly or we are well staffed for the order book that we have?
So I would say that we are adequately staffed, but depending upon the orders, what we are taking and things like that, there is a plan which is always under a review. And whenever we think that, we are going to need people, so there is a plan to add them.
Got it. Okay, one last question from my side. I'm sorry for nitpick, but just looking at a quarterly trend, especially in the last 2 quarters-3 quarters, our gross margins were around 36% in quarter 2 and quarter 3. They've come off to 33% in quarter 4. Is there anything to read in it, any one-time or any legacy orders getting closed, or any mix change?
So, this particular analysis, we have been talking almost every quarter, that in terms of gross margin, it's better to look at the entire year performance. On a full financial year basis, we achieved a gross margin of about 36.5%, which was 5.5 percentage points higher than the last financial year.
Got it.
Every quarter, it depends on the mix of different businesses that we do, different products and different contracts, so that can vary a little bit. But overall, we have made a very significant 5.5 percentage point improvement in the growth margin in the entire financial year.
Definitely, definitely. Thanks a lot, and best wishes for the future, and congratulations on great numbers. Thank you.
Thank you, Inderjeet.
Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Dhruv Agarwal from Niveshaay Investment Advisors. Please go ahead.
Yeah, yeah. Good evening, sir. Sir, I have just two basic questions. So firstly, I wanted to understand that if in an EPC project, suppose the project sizing is INR 3,000 crore in the transmission segment, then how much cost is incurred on the towers, cable, and wires, on the substation in that 3,000? If you can give the rough idea.
I think, Dhruv, it will be very difficult to give a rough idea, because, you know, different projects have different combinations. For example, if it's a 400 kV or it's a 765 kV, if somewhere the substation is smaller, maybe 1,500 MVA, somewhere it is 3,000 MVA, somewhere the lines is longer, somewhere the lines are shorter. So we- this is a very project-specific breakup which is there.
So you cannot just simply, take a break, take a value and then say that, "Okay, this is going to be the breakup in that."
Okay, okay. Sir, the second question would be on the, the STATCOM. Sir, when setting up this substation, what percentage of cost would be or what percentage of amount will be, spent on the STATCOM, sir, as a percentage of total, cost on setting up this substation?
So that's what I said, that the STATCOMs are normally, STATCOMs are, are getting ordered separately and substations are getting ordered separately. So that's what I said, that depending upon the STATCOM rating, each STATCOM would be somewhere between INR 50 crore-INR 500 crore.
Sorry, sir, INR 50 crore to?
INR 50 crore to 500 crore.
Okay, 50 to 500, this is your broader range.
Sir, can you just quantify in terms of percentage, sir, if, if, it would be possible for you?
So substation is not included in the STATCOM.
Okay, so it would be set up on, which sites are, like you said, on the renewable side, the STATCOMs are set up. So can you just quantify where would be this?
You are asking me that where the STATCOMs will be set up?
Yes, yes.
We have a lot of projects, like we have in Khavda, we will have in Bikaner, Bhadla, South Olpad. So lot of wherever renewable substations are coming, STATCOMs are coming with them.
Okay. And the... And which companies are setting up this STATCOM, sir? Is this the only GE T&D company setting up the STATCOMs, or is there any some other players also setting up the STATCOMs as well, sir?
There are other players as well.
Okay, okay. Fine, sir. Thank you. Thank you, Dhruv.
Thank you. As there are no further questions from the participants, I would now like to hand the conference over to Ms. Megha Gupta for closing comments.
Thank you all for joining us today. We hope the insights provided by our speakers have been informative and valuable to you. We value the trust and support of our investors and analysts, and ensure to remain committed to maintain transparent communication and fostering strong relationships. If you have any further questions or require additional information, please do not hesitate to reach out to me or our communications leader. Once again, thank you for your participation in today's call. We look forward to your continued support. Thank you.
Thank you. On behalf of GE T&D India Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.