Hitachi Energy India Limited announces Q2FY23 results :  Consistent performance on a strong order pipeline

Bangalore, Nov 04, 2022 – Hitachi Energy India Ltd. announces results for the financial period from July to September 2022.

“The continued order growth momentum was driven by key wins in renewables, industries and transport segment. Consistent focus on execution, close customer connect and various mitigation efforts are tempering the impact of tight supply chains on earnings,” said N Venu, Managing Director and Chief Executive Officer, Hitachi Energy India Ltd. “Meanwhile measures to reduce our own carbon footprint are yielding results with over 40% YoY reduction in emissions.”

Orders

In the quarter ending 30 September, we received orders worth INR 1,278.5 crore, up 31% YoY. We continued to gain traction from customers in the focus markets such as renewables, railways, data centers and substations for industries. Some of the notable orders included transformers for NPTC Renewable Energy Limited, and transformer and SCADA solutions for railways. Additionally, we booked several orders for power quality and high voltage product offerings.

At nearly 25% of the order book, exports remained healthy, with orders from established export markets of Nepal, Bhutan, Middle East, and the Americas. Understanding the market requirements, Hitachi Energy has been proactively augmenting its manufacturing muscle to meet changing demand.

Service orders remained strong from a healthy mix of base orders for retrofit and spares from utilities, including some breakthrough orders for GIS bay extension and Substation Automation Systems (SAS). As a partner across customers’ plan-build-operate lifecycle, Hitachi Energy in India continued to provide technical expertise services such as renewable studies for utilities and engineering advisory for mining behemoths.

As of September 30, 2022, the order backlog stood at INR 7,009 crore, providing revenue visibility for the coming quarters.

Turning one and stronger than ever

Last year, the Hitachi Energy identity was launched with the purpose of advancing the world’s energy system to be more sustainable, flexible, and secure. The company’s pioneering technologies and solutions are helping to accelerate the carbon-neutral future, improving the quality of life for today’s generations and those that come.

India holds significant potential in energy transition with grid modernization, smart grids, and digitalization. Hitachi Energy takes pride in the real impact it makes by deploying technologies and solutions that decarbonize the energy system. In Q2FY23, India operations’ carbon emissions declined ~40% YoY.

Through our first year we invested in capabilities to cater to the evolving energy landscape; strengthening our foundation of talent and expanding our manufacturing footprint. In the September ending quarter Hitachi Energy inaugurated the greenfield power quality factory in Bangalore and initiated manufacturing of next generation switchgear operating mechanisms, catering to India and global markets.

Hitachi Energy believes there is significant potential to support customers to scale up and accelerate digitalization by leveraging its capabilities in power systems and advanced digital technologies. This is the beginning of another chapter where the company will continue and deliver results with strategic expansion to drive focus markets.

Revenue

Revenue rose 31.2% YoY reaching INR 1,115 crore for the quarter that ended September 30, 2022, despite the impact of semiconductor shortage. Hitachi Energy in India continued its focus on growth opportunities, including service, while maintaining optimal liquidity and cash position.

Profit and operations

Industry remains optimistic with several project announcements demonstrating sustained belief in India’s long-term growth story. However, in the short-term, the company continued to face semiconductor shortages, commodity and freight prices increase, and foreign exchange volatility. Efforts towards mitigating their impact of have been yielding results, reflected in profit before tax which was up 6.4% YoY at INR 50.2 crore, and profit after tax that was up 8.3% YoY at INR 37.2 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).