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Hitachi Energy India Limited announces Q3FY23 results: Orders show robust growth
- Renewables, data centers, and industry drive 31% YoY order growth
- Revenue declined 8% YoY due to supply chain constraints
- Chips shortage, commodity price fluctuation continue to pressure the margins
- PBT at INR 13.4cr; PAT at INR 4.6cr
- Solid cash performance
Bangalore, Feb 06, 2023 – Hitachi Energy India Ltd. announces results for the financial period from Oct to Dec 2022.
“Our focused approach to advancing a sustainable energy future backed by our commitment towards supporting the customers to integrate renewables at scale and embrace digital transformation has been helping us build a robust order pipeline,” said N Venu, Managing Director and Chief Executive Officer, Hitachi Energy India Ltd. “However, in the short term, the global macro-economic forces, together with supply chain constraints, continue to impede margin accretion.”
In the quarter ending 31 December 2022, orders maintained double-digit growth, up 31.3% YoY to INR1,222.1 crore. Driven by orders for transformers for renewable energy evacuation and interstate power transmission projects, high-voltage products to a state-backed greenfield refinery and CoreSense™ technology to help a steel major in the digital transformation of their power assets. Transportation orders continued on the back of 100% electrification and hi-speed railway initiatives.
Exports contributed over 20% of total orders from established markets in Middle East and Bhutan, and new inroads in South Africa, Central Asia and Europe. Services continued healthy growth for our GIS substations, transformers, and high voltage products as we continue to deliver significant customer value as trusted long-term partners.
As of December 31, 2022, the order backlog stood at INR 7,231.3 crore.
Revenue declined 8.5% YoY reaching INR 1,041 crore for the quarter that ended December 31, 2022, mainly due to supply chain constraints, led by shortage of chips and electronics. The company focused on improving liquidity through cash management, to help us capitalize on the continued market investment. This resulted in solid cash generation in the quarter.
Profit and operations
Year-long geopolitical tension has led to adverse inflation and interest rates, rising commodity prices, forex fluctuations, as well as global supply chain constraints. Despite redoubled efforts towards supply chain management - including restoring channels for chips and electronics – and improving operational efficiencies, these persistent challenges continue to pressure margins in the short term.
Efforts are underway towards further accelerating operational efficiencies and optimizing at factory levels to improve competitiveness and liquidate inventory. Driving strategic investments in high-growth segments will also help strengthen profitability and should ensure the bottom line remains healthy in the long run.
The profit before tax in the quarter stood at INR 13.4 crore, and the profit after tax was INR 4.6 crore. Operational EBITA stood at INR 29.9 crore in the quarter.
As the world grapples with multiple economic and geopolitical challenges, the pressure on supply chains, including chips and electronics should ease with manufacturing capacities gradually clearing out backlog over the coming quarters. Against this backdrop, we expect the energy transition momentum to continue driving growth of energy network infrastructure such as flexible grids, driving demand in the medium to long term.
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.
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.