Hitachi Energy India Limited (NSE: POWERINDIA) Q1 2026 Earnings Call dated Jul. 30, 2025
Corporate Participants:
Unidentified Speaker
N Venu — Managing Director and Chief Executive Officer
Ajay Singh — Chief Financial Officer
Analysts:
Unidentified Participant
Mohit Kumar — Analyst
Ankit Pandey — Analyst
Umesh Raut — Analyst
Parikshit Kandpal — Analyst
Renu Baid Pugalia — Analyst
Rajesh Kothari — Analyst
Sri Om Kapoor — Analyst
Sarbamayan — Analyst
Harshit Patel · — Analyst
Pratik Singh — Analyst
Abhijit Deshmukh — Analyst
Dhavan Shah — Analyst
Presentation:
operator
Sam SA IT conference is now being recorded. Ladies and gentlemen, good evening and welcome to Hitachi Energy India Limited’s Q1FY26 analyst 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 this 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 Mr. N. Venu, MD, and CEO Hitachi Energy India Ltd. Thank you.
And over to you Mr. Venu.
N Venu — Managing Director and Chief Executive Officer
Thank you Nirav. Good evening everybody. Thank you for joining us for the Analyst conference call today. I hope you are all doing well. Today we announced our Results for the first quarter of the financial year 2526 and over the next 2025 minutes, together with my colleague I will take you through our performance from April 1st to June 30th, 2025 and for your convenience I will read out the slide numbers and we already uploaded the slide deck in the stock exchange today. I’m joined in the room by our CFO Ajay Singh and the General Council and Company Secretary Poonamatanda, our Head of Communication Government Relations Seema Siddiqui.
Throughout the last fiscal our focus was on balancing operational complexity and efficiency which helped us continue to achieve a strong order in tech resulting in a record order backlog in 1Q25 26. Despite a volatile geopolitical scenario, the Indian economy remains one of the fastest growing economies. The same will positively impact several ongoing energy initiatives further strengthening the country’s energy ecosystem. I move to the slide number three at Hitachi Energy you all know by this time we continue to emphasize the importance of safety, integrity and quality in our day to day operations. These what we call as our license to operate and we never look the other way when we have to deal with them.
They are very key pillars of our work ethic. In the first quarter of the financial year, the focus on safety continued towards keeping the incident frequency rate within the defined corridor by learning from global incidents and also taking timely prevention actions across our sites. It’s always heartening to see one’s work getting recognized on our safety efforts. During the quarter, our teams from different businesses received several appreciation letters and awards from our descending customers. Employees are our strength and their physical and mental well being is one of the utmost importance for us. This quarter we organized several initiatives including multiple awareness sessions on key health topics such as health screening, first year training, mental health discussions, programs, etcetera Also, International Yoga Day was observed across our offices and facilities with a large number of employees participating in specially designed modules for their areas of operations.
Moving to the Next Slide Slide number four At Hitachi Energy, our purpose is to inspire the next era of sustainable energy by making the world’s energy system more sustainable, secure, resilient and affordable. While we march forth to our purpose, the Company also ensures that it practices sustainable measures in the three key aspects, I.e. planet people and principles. Under Planet, we have reduced CO2 emissions by 84% and waste by 69% respectively in our own operations compared to base year of 2019. The company continues its efforts to reduce fresh water consumption to 25% from 18% in the last financial year.
We already achieved a 100% mark of using electricity from renewable sources in all of our operations throughout our sites. When it comes to our people, our focus persists on safety and diversity. We are committed to zero harm and fatalities, zero harm and fatality freeze and maintain a healthy mix of diversity in our work ecosystem. For principals, the aim is always for zero incidents pertaining to integrity. I move to the slide number five and I’m sure on the left hand side you know more than me, but still I’d like to touch upon a couple of points on this Indian economy remains one of the fastest growing economies reflecting the country’s resilience and policy driven growth today making it the fourth largest economy in the world.
The country experiencing positive economic indicators. Inflation has cooled down to a six year low of 2.1% in June 2025 along with a surge in total exports and FDI. Though uncertainty looms over US tariffs, we expect more clarity in the coming weeks to ascertain the impact in India and also for our business. Steady economic growth continues to have a positive rub off on the manufacturing segment as the PMI stood at a 14 month high in June 2025 at 58.4. The scheduled investments in growth segments like Renewable Data Centers and Metrorail remain on track for the nep, the National Energy Plan.
The market reports suggest that in the next two years spending up over 1 lakh crore on the Interstate Transmission System network to meet 2027 NEP target. Furthermore, the focus on discom upgradation and modernization continues. Uttar Pradesh, one of the largest states in India, is looking to privatize two of its four power distribution companies which is a positive step in the right direction. I move to the next slide slide number six this quarter quarter ending June 30, 2025 our orders total all time high of 11339.2 crores and revenue stood at 1529.8 crores growing 365% on orders and 15.3% on the revenue on a year on year on year basis.
Effective execution of high margin orders, sustained operational excellence and good product mix help to achieve a high year on year growth in profit before tax and profit after tax. Some of the key orders for this quarter include an order from a powergate to supply 30 units of 765kV, 500500 MBA single phase transformers and also the renewable solar 400kV GIS and industries 220kV by 33kV GIS and semiconductor manufacturing factories in Chennai Rail, several transformers and Scott transformers and several automation CRP SCADA projects and also service upgrade projects and all these things in addition to our HVDC project which we already announced previously, moving to the slide number six Sampa number seven, this is the one which you know.
We have announced this Badla Fatehpur HVDC project in this quarter from Adani Energy Solutions which is awarded to the consortium of Fitaj energy India and BHEL which is a 6000 megawatt of 800kV bipolar bi directional HVDC project over a distance of 950 km from Badla in Rajasthan to Fatehpur and our scope includes provide converter, transformer, AC DC control protection, thyristor valve, 765kV, 400kV, grid connections and auxiliary systems etc. If I move to the slide number 8 at Hitachi Energy we have encouraged knowledge exchange across industry stakeholders. To this end we have organized technical seminars for esteemed customers across geographical boundaries.
The sessions focused on the advanced features and benefits of our hairpin type, dead tank, CTE and maintenance, free springless isolators and econic solutions. The sessions were attended by domestic utilities and national utilities of neighboring countries, rail segment customers and also the new age customers to name a few. In our keenness to level up our services, we have received two industry recognitions for consistent quality improvements. Our teams won the Gold award at QCFI convention 2025 for transformer and CIS 52nd kaizen computation 2025 for grid automation. I’m also happy to inform you that we expanded our Women in Engineering program by welcoming a new batch of students from Gujarat.
Also, as part of our commitment to education, we have undertaken the task of upgrading two government schools in Vadodara with smart classes. We continue to encourage our employees to participate and represent the companies on various platforms. During this quarter two of our women colleagues represented Hitachi Energy as a key speaker at the IE Power and Energy Societies and IEEE Asia 2025 events and the company Hitachi Energy India is a key contributor to the National Energy Policy through India Energy stake Moving to the slide number nine As a pioneering technology leader we remain steadfast in our commitment to strengthening the nation’s energy security through a range of impactful projects.
This quarter we successfully commissioned some key projects and I would like to take a moment to highlight few of them. We commissioned 66kV GIS transformer bay extension at Kerala Delhi for Tata Power Delhi Distribution Limited a 400 by 220 KVI substation at Lapanga, Odisha for Aditya Birla aluminum smelter, a 400 KV bay extension in Odisha and installation in Chhattisgarh respectively for opt, CLI and balco. For all these commission projects, our teams were responsible for designing, engineering, manufacturing, supplying, erecting, testing and commissioning according to the defined scope of work. Moving to the slide number nine to provide some more color on the orders received this quarter in terms of the segment, the transmission continues to lead the order book followed by orders from the rail and Metro and data center in the Q1 FY25 26.
Both Transmission and rail Metro experienced a sharp growth of 625% and 845% respectively. The data center segment witnessed almost a 7% growth and industry growth is at 23%. However, there is a decline of 25% in renewable wind and solar which we feel is a temporary phenomenon and it’s a timing issue in that the order mix is shown on the right in the graph you can see the projects have taken the lead. Of course if you look at the order mix on the right hand side this is without hvdc. If you do with HVDC the project takes leap but in the without HVDC scenario the product continue to be higher followed by the projects and services moving to the next slide which is our further levers of our growth.
Service and Exports Both services and exports remain consistent in this year as part of the order book and diverse geographies and industries help sustain export momentum. Exports maintained consistently by contributing nearly 25%, 24.7% etc. Of order book, that is without considering the HVDC. This quarter export orders were received from Europe, South America and Asia ranging from common apparatus and devices, capacitors, filters, circuit breakers, grid automation, etc. Service orders grew 90% year on year. This is also our first quarter after we carved out our new service business which started from work effective from 1st of April 2025 and contributed a high single digit to the overall order book.
Some of the key service orders include SCADA upgrades, equipment replacement and annual maintenance contracts. As you are aware we introduced our service business which I have already told you and basically the purpose of the service business unit is to intensify life cycle engagement with our customers. Not only utilities but also industries and the new age customers. All of our business units are working closely with the service business unit to maximize our reach. I now go to the slide number 12 and hand over to our CFO Ajay to take us through this slide and the next slide.
Over to you Ajay.
Ajay Singh — Chief Financial Officer
Thank you Venu and good evening to all. Hope you are all doing well at your end. So let me take you through the financial performance for quarter 125 26. In this quarter ending 30 June orders were 11,339 crore up to 65% year on year and this was primarily because of the large order of Babla Fatehpuram as we did see order that was that we booked in this particular quarter and that is the result. You see we closed the highest ever order backlog of 29,135 crores which provides the visibility of revenue for the several quarters.
The company delivered a strong revenue performance of 15,029 crores with 15.3% growth y and Y and this resulted this actually happened from very good order execution during the quarter and constant improvement on the overall operational efficiency. Furthermore, our continuous focus on the effective execution of the high margin orders, sustained operational excellence and a good product mix and also increased export momentum saw a phenomenal Y and Y growth in the profit before tax and profit after tax. And if you see The PBT and BAT, PBT is standing at 176.9 crore and PAT we closed at 131.6 crores crores respectively.
If you see the operation EBITDA operational EBITDA for the quarter stood at 170.2 crores and this has resulted in a double digit margin of 11.1% for this particular quarter. If you go to the next slide, let me see a little bit dissect more on the squash structure, how we fared. So if you see for the three months ended the 36th of June 2025 of the total income 15 and 29.8 crores the metric cost was 53.8%. So in this particular quarter as we discussed earlier there is a very good development on the gross margin which has really Helped in the bottom line development personal expenses were 9.5% and if I compare with YU and Y of last year 9.2% fairly I will say we are consistent other expenses 22.7% again if I compare Y&Y 23.6% I would say it is consistent.
In this particular quarter we had exchange and Commodity loss of 9.4 crore depreciation 25 crores basically if you see there is a slight increase and this is mainly because of the capitalization for the CAPEX projects that we are doing continue doing that. Finance cost is 4 crore which has come down. If I compare Y and Y and measurely because we do not have has any short term borrowings in this particular quarter and that is how the development we see in this particular quarter we are able to close the pack 131.6 crore of 8.6% so with this I hand over to Venu for the closing slide.
N Venu — Managing Director and Chief Executive Officer
Thank you Ajay. And if I move to the slide that is slide number 14 which are our priorities for the coming quarters and the whole of finance year. As we closed the first quarter of this financial year, our focus remained on the dual objectives of maintaining growth momentum and enhancing overall efficiency in all spheres of our work and maintaining our leadership in core segments Renewable utilities, HVDC industries, infrastructures remains our key priority. We consistently endeavor to harness potential opportunities in new segments like data centers, sector and focus strategies to leverage opportunities in service, export and digital segment.
Furthermore, the focus will remain on strengthening the service business in India and the company will continue to drive productivity with an emphasis on operational excellence to improve productivity, quality and opportunities under one Hitachi umbrella to leverage synergies etc. On the business front, consolidated efforts will be made to leverage the large order backlog for revenue accretion and margin accretion and also focus strategy for the utilization of the capital raised during the QIP to complete the expansion projects in line with our timeline strategies etc. With safety deeply embedded in our culture, our commitment to fostering a strong first safety first work environment remains steadfast.
At the same time we continue to invest in expanding our capabilities for sustainable growth whether through upskilling and cross skilling our workforce or by strengthening our operational footprint to inspire the next era of sustainable energy future. So we are looking for long term strategy and long term growth and sustainable strategy. So with this I close my presentation and open the channel for questions. Thank you,
Questions and Answers:
operator
thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question May press Star and one on their touchton telephone. 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. I request to all the participants kindly restrict to two questions per participant and join the queue again for a follow up question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the land of Mohit Kumar from ICICI Securities. Please go ahead.
Mohit Kumar
Yeah, good evening sir and thanks for the opportunity. My first question is what was the value of XHVDC order in the quarter? If you can quantify or can you give us the growth in the order xhvdc.
Ajay Singh
Sorry, what is the second one?
Mohit Kumar
No, either you can give the value of XHVDC order or give us the growth in the order xhvdc.
Ajay Singh
No, we have also seen the growth without hvdc. Also the growth without HVDC is. Is in the Double digit range around 20 to 20. In the range of 20 plus percentage. Yeah, I just know the similar projects are going on. So we will not quantify exact value of hvdc. But you can understood what kind of number.
Mohit Kumar
Understood? Understood sir. The second question is that how has been the progress on execution in the HVDC1 I think in September, October 24th.
Ajay Singh
So we also told in the last thing these are HVDC projects. It’s a pretty long multi year project. Our completion period is 48 months and 54 months. 48 months is we have to complete the bipolar one and 54 months is a bipolar two. So execution will take place and normally in the first year. I also told you the revenues are not much. So we expect some amount of revenues starting from the next year, next financial year and thereafter. Then it will become that. So that’s
Mohit Kumar
understood sir. Thank you and all the best. Thank you.
operator
Thank you.
Next question is from line of Ankit Pandey from Motilal Oswal. Please go ahead.
Ankit Pandey
Hi sir, from Motilal Oswal. Sir, regarding the margin profile, would like to when we compare it with our peers. Our peers have increased margin significantly. So our margins do have improved but not up to that extent. Any possibility of reaching to those margins or it will take us a time to re means revamp on those kind of margins.
N Venu
So thank you Ankit for your question. So we have as I said we are building a company on a very long term focus not on a short term basis.
So we are. And we also told you several times that our main focus is to address the domestic market. We Believe that the domestic market, the pipeline and the market visibility is very strong and it will continue to strong. That’s the reason we are investing 2,500 crores of capex which I’m sure you have not seen this kind of capex from others. So when I would like to compare, I would like to compare. So we are improving margins and you have seen almost 650 basis points. We improved Y and Y on EBITDA basis and we continue to improve going forward on that and on the core order inflows wise.
Also one should expect this kind of a trajectory to continue where we are seeing good traction on the core audience. If you really look at the overall orders, there are two aspects to that. There’s the HVDC portion and then the rest of the things. Right? Rest of the things is we are talking about the renewable industries, data centers and rail etc. That pipeline is extremely good and hvdc. You all know that I’ve been saying in that to manage the network of India we need to have at least 2 to 3 HBTCs per year at least in a couple of years to start.
At least couple of years more.
Ankit Pandey
Got it? Got it. Great. Sir, I will come back for any further questions.
N Venu
Thank you.
operator
Thank you. Next question is from the line of Umesh Raut from Nomura. Please go ahead.
Umesh Raut
Yeah, hi sir. Good evening.
N Venu
Hello.
Umesh Raut
Hello.
N Venu
Yeah, go ahead.
Umesh Raut
Sir, my first question is pertaining to.
operator
Sorry to interrupt you, your audio is not clear. Can you speak through the handset please?
operator
Is this fine now?
N Venu
Yeah, it’s okay.
operator
Little better.
Umesh Raut
So my first question is pertaining to translation of gross margins into EBITDA margins for this quarter. If I look at despite achieving closer to 44% plus kind of gross margins, our EBITDA margins are remaining in the range of about 10 to 11% and larger.
Part of that is also because of higher other expenses at about 24% of sales. I believe our related party transactions like royalty management fees, trademark fees are also eating up closer to 8 to 9% of sales within that other expenses. So how we kind of expect these, these kind of expenses to go down so that our margins can improve in line with our peers.
N Venu
So again we have been saying this consistently Andre. So we are a technology company so we need to really create technological advantage and by paying royalty and other things is absolutely important because we are able to get technology as and when it is available anywhere within Hitachi Energy globally.
So that will be there in that. But we are looking at overall expenses once our revenues goes up. Probably some of the expenses Are not percentage, some are percentage, some are a fixed amount which will be converted into the percentage in that. So those things will be tapered out over a period of time. Maybe Ajay, you would like to add.
Ajay Singh
Yeah. So thank you for this question. So if you normally see our quarter one quarter one our other expenses as that is the reason when I told other expenses on basis more or less it is consistent.
But going forward, once we develop on the revenues the sum of the expenses automatically gets translated. And that is why if you see the same other expenses we closed at the year end it was around 20% so to say. So we are. We are working on the other expenses piece for sure. But overall at the end of the year we will get a visibility on how when we have the full loaded revenue we will be able to see that our other expenses are also in line.
Umesh Raut
Got it. Sir, my second question is pertaining to HVDC project pipeline.
I believe there are three projects which are in the pipeline to be finalized for FY26. So what is your view in terms of timeline for one Kauda South Olpar HVDC project. Second Barmer South Kalam HODC project and third Lehladak HODC project.
N Venu
Yeah, I think what you talked about the pipeline is absolutely correct. But if you’re talking about our view on the finalization. Right?
Umesh Raut
Yes sir. In terms of rough cut, approximate timeline for awarding,
N Venu
talking about finalization, our view is that one project in this financial year for sure. But there could be also potential for the second project getting finalized.
So it’s basically one to two projects finalization in this financial year. That is on or before the 31st of March 2026.
Umesh Raut
Got it, sir. Thank you so much and all the very best.
N Venu
Thank you.
operator
Thank you. Next question is from land of Parikshit Kandapal from HDFC Securities. Please go ahead.
Parikshit Kandpal
Yeah. Hi. Hi sir. Congratulations on a decent quarter. So my first question is on the what is the total order book of the base orders X of HVDC out of the 29,000 crores
N Venu
roughly in the range of. You know you can take anywhere between 55 to 60% is H vac.
The rest is okay.
Parikshit Kandpal
And out of that how much is export and services?
N Venu
No, we don’t split there. You know how much is exports and service? You know service is just picking up, right? You know, we don’t split further on that. It’s again, you know, don’t look at in every quarter whether the product, service thing. You know you have to look at the whole portfolio, right? The whole portfolio. For us includes the project system, services and software and also hvdc. Again when you say HVDC means the HVDC portion also has transformer. HVDC portion also has, you know, GIS and high voltage.
HVDC portion also has, you know, grid automation. So it is a very difficult to segregate, you know, hvdc. The point what probably you are looking at it, that’s the reason I say 6% is how much will be executed in the next, you know, 18 months and how much will be executed beyond 18 months
Parikshit Kandpal
and when just on the total GPM. So now we have reported 44% on gross profit margin. So and there’s no, no major contribution. HVDC will start contributing maybe a year after from now. So in the HVDC what kind of GPMs do we look at will be substantially lower or will be in the similar range.
So what kind of dilution can happen on the GPM from HVDC project?
N Venu
We will not talk about a project margin. So all we have been saying is that we have been building not today over a period of time we have been saying that we are looking at a very sustainable margins, double digit margins and that’s what we are in a roadmap. So last year we said when we enter and we have entered much ahead of our own target and then we also starting the same strong way it will be very solid performance going forward in our own View.
Hello, Mr. Operator, are you there?
operator
The line for the participant dropped. We move on to the next participant.
N Venu
Okay,
operator
next question is from the line of RenoBaid from IFL Capital. Please go ahead.
Renu Baid Pugalia
Yeah, hi, good evening team. I have a couple of questions. First, can you share with us the update on the first HVDC which we had won with Adani? How far are we from from the formal completion of the project? Second, would you have any insights on the prospects for Lehigh HVDC as we hear that Hitachi apparently has not submitted the bids and there’s only one sole bidder for the project so far.
So are we seeing the project, the LAY project moving ahead or any updates from your side if you would have any on it?
N Venu
Yeah, what was your first question? We already given update in the.
Renu Baid Pugalia
Not the current project, the project, the Mumbai HVDC which we have which is back.
N Venu
We may be around six months. Six months is the one where we are looking at to close commission that six to nine months.
Renu Baid Pugalia
Okay, sure. Second, any insights on what’s the status for LAY hvdc?
N Venu
Yeah, as far as we are concerned it’s going also, you know there have been a lot of discussions taking place what kind of, you know, technology all those things are still it is in the in the discussion stage.
So I don’t know about what is the latest, but this is how it is going on that.
Renu Baid Pugalia
So in your view do you think there is a probability that instead of the project coming on HVDC format it may actually eventually turn out to be a AC crossing?
N Venu
Now that is anything is possible. I can’t say that but the probability of that AC transmission coming in that thing is very less. I would think that. Okay, so yeah,
Renu Baid Pugalia
get it. And lastly, while I know you don’t comment individually project wise, but just trying to understand the current quarter as in gross profits have come back at pretty healthy levels compared to the previous cycle.
So do you think this kind of gross profit performance of almost 45% is sustainable given the current mix of backlog that we have? Or it would be more of a combination impact for this particular quarter alone and one should not bake it into the expectations going forward.
N Venu
No, I think it is not only gross profit has come back, but also net profit also come back EBITDA level. We have improved 650 basis points compared to the loss Y and Y. So again we will not comment unacquoted but what we are looking at on an overall basis we said we are looking at a very long term strategy, mid to long term strategy and we are continuously improved on our performance.
So we are also investing on the future things. So that also need to be done. If you really want to look at in a long term it’s always between what is that? Do you take a short term measures and long term measures. So we choose
Renu Baid Pugalia
right because some of these investments in technology capacities will all be a part of other overheads which was the reason why the question was on material. Yeah, well also look at.
N Venu
No, structurally we are absolutely fine. Structurally I don’t see there’s an issue in that. As our volumes goes up that’s where the thing rest of the things as I told some of our, you know charges which are fixed in nature will convert into percentage and as the volumes go up will come at a low low percentage in that and that’s what you’re seeing that and we will improve last year improved and this year also on an overall basis we will improve higher than last year.
Renu Baid Pugalia
Got it, got it. Answer. Lastly, anything specific that you would want to share in terms of export pipeline, any regions or markets where you are seeing increasing traction with respect to order conversion for us
N Venu
no export pipeline is quite strong, quite robust. And as I said, we have a three pronged export strategy. Again, exports also sustainable exports, not that we want to go spike and then come down. So that’s not our strategy. So we have products, four or five products which are four products which are global products. We are improving and on top of that we have also allocated markets.
So we are getting more markets allocated as and when those markets are rectifying it. And we will put a lot of our efforts to develop those markets in sustainable just like how we develop Indian market. And the third one is we have a very basic exports strategy which is we create a components for our feeder factory and those things are also very robust. Again, we do not want to increase the export at the cost of the domestic market which I have said previously. Also I’m reaffirming, clarifying that. And our domestic pipeline is quite strong.
Renu Baid Pugalia
Got it.
Thanks Martin. Best wishes team. Thank you.
N Venu
Thank you.
operator
Thank you. I request for all the participants kindly restrict to two questions per participant. Next question is from line of Rajesh Kothari from Alpha and vsco. Please go ahead.
Rajesh Kothari
Good evening sir. Thank you for this opportunity. Rajesh Kothariya from Alpha Crude Advisors. Sir, I have one question with reference to the, you know, the export opportunity. And if I look at the globally the statements what I am reading from the in the top CEOs of the world they all are hinting towards the, you know, very large pipeline of the potential demand growth.
So how the you know, the Indian company is positioned to cater to such requirements. And since you are looking to invest about 2000 crores in terms of your exports target over next say three to four to five years. How should we look at the, you know, the total revenue mix?
N Venu
Yes, so we have again we clarified this again and again we want to clarify once again we the investment, whatever we are, we are doing it to the Basically we believe that we have a huge domestic market, domestic demand and that’s the reason we are doing it.
Exports is yes on top of it. But you know, we don’t create capacities only for the sake of exports. Right. Exports will as always it has been there, it will continue to be there. And I explained just now also it’s a three prone strategy. In the roughly we are looking at around 25% of the of exports. Maybe it might go a few percentage this way, that way over a period of time. But again it again depends upon the thing we’ll be putting a lot of efforts to solve our domestic demand and that’s what we’re going to do that and then on top of that we get an opportunity.
We will do more than 25%. But 25% is what I see in the next couple of years plus minus 2 percentage this way, that way.
Rajesh Kothari
So when you look at your competitive positioning to get the export ordered, you know, compared to say Hitachi Energy India within the group, who will be the other, you know, competing companies within group,
N Venu
within group means,
Rajesh Kothari
for example, I mean Hitachi Energy globally,
N Venu
again it is a market. So we have a lot of, we are working in our more than 60 countries. Our footprint is also, you know, very, very robust in many countries.
Right. You know, it’s not that in a, anybody can send anything. We have factories in the regions, we have the factories in the home countries and there is a clear market allocation guidelines so that you are able to develop those markets sustainably over a period of time. And also there is a lot of approval process to approve our factories. So all those things are guiding principles.
Rajesh Kothari
Okay. So basically if your domestic revenue is going to go up significantly because of this order book and also the, the pending HVDC order pipeline, you think that exports will also able to maintain that growth.
Therefore your revenue mix will not change Significantly at least 25 to 27.
N Venu
That’s the reason we are investing, we are investing in the capacity. So our capacities will start coming in the next 18 months or so and that will be compensating that so that we are able to keep 25% as a revenue even at a higher revenue.
Rajesh Kothari
And just last question, you know, till the time of course the new orders comes to the execution stage in the next from the 12 to 24 months kind of a period, you know, the shorter term, kind of a shorter tenure orders particularly say for example for data centers or for other such application or for the metros.
Can you give us a little bit more, you know, insight into that, that you know, how is that demand growing? If you can quantify that in terms of the overall demand and how we are winning it. And little bit outlook on your different segments, data center, Metro trains and other segments that
N Venu
we have seen. If you really look at my slide 10, as you can see industries, we have a 23% growth. They are very short cycle projects. Data centers 98 was almost doubled compared to the data center last quarter here. So data center there was a bit of lull previous quarter but now everybody has looked into what is the AI ready data center.
Now they’re all coming back very strongly on that. And the rail and metro also we see A very, very robust thing in that. But with the renewable now, the issues of PPA and other things getting resolved, we see that the renewable projects also come. All these things are short cycle projects. So they will be executed once we get the order, anywhere between six months to 18 months. We complete the exhibition in that. Except the HBDC which takes a longer, longer time in that. So those things, the pipeline. That’s what I said. The pipeline is very robust.
It is much, much stronger, much higher and we see the visibility of those things coming in that.
Rajesh Kothari
Great. Thank you sir. Wish you all the best.
N Venu
Thank you.
operator
Thank you. A request to all the participants. Please restrict to two questions per participant. Next question is from line of Sriom Kapoor from Jeffries, India. Please go ahead.
Sri Om Kapoor
Thanks for the opportunity. Just had a question on. You know, you classify your business into your five business units, transformers, high voltage products, grid integration, grid automation and now services as a new business unit. Would you be able to give us some color, you know, individually within these units if it’s possible on how the outlook is and maybe a rough sort of share in the business of each of these units?
N Venu
No, thank you Shirom.
Actually we are not giving a split of this thing but we can give you a little bit of, you know, direction on that. So transformer is by far the highest and followed by our grid integration business. And the next is high voltage business followed by the grid automation and the second service. So we’re talking about the, you know, outlook. Most of the segments, they, they buy more than two BU products portfolio. Okay, I give you one or two examples. Transmission for example, transmission needs transformer. Transmission needs our high voltage BU products. Transmission needs our grid automation products.
Transmission needs our either power quality or HBU or start comps etc. And so that’s where all the four business units will go into that transmission also need the service as required. Then it comes to the industries. Industries may need your transformer or high voltage or sometimes industries need your grid connections etc. So again 2, 3 BU product portfolio will go into that data center. I give you a last example. Data center for example needs your transformer, your dry type transformer. You are also grid connection transformer, your grid integration. You need a substation to hook up to the hyperscale data center and then you also need automation and the consulting efforts in there.
So basically most of these things 2, 3 BU or more than 3 BU products portfolio growth. So that way outlook means if the segment outlook is strong, then all the 4 bu outlooks is also equally strong.
Sri Om Kapoor
Okay, understood. Thanks that’s very helpful. Second question is on your capacity expansion over the next four to five years where you’re incurring 2,000 crore capex, could you maybe quantify how much your capacity is going to expand by specifically within transformers as well as the other business segments where you’re expanding capacity and how that could scale up your revenue potential? And if you could give a sense on what the current capacity utilization is which is warranting this major CAPEX expansion.
N Venu
No, I think we talked about the capacity expansion. So we basically said that the capacities are required when we announced it. It’s also for our transformer. Not only transformer but transformer high voltage grid automation and also hvdc. And the scale of expansions are different from different bus etc in that and all these things also we are doing in a phased manner. For example first transformer capacity which is small capacity expansion which is already coming in and the next phase we are going in like that. Now we are going in a phased manner so that we are able to complete our scheduled capex in line with our own targets etc.
In that. So again it’s. If I go 2000 crores capex if I’m going to put it there, once it is complete the asset turnover is in the range of anywhere between three to four or something like that, four to five depending upon that. So you can just look at it. What could be the revenue potential once it completes on that Initially it starts with a load asset turnover and then thereafter it goes up higher than that.
Sri Om Kapoor
That’s very helpful.
N Venu
And current capacities. I think current capacities are. I would say we don’t quantify exactly the current capacities but it’s a very strong in some of the product lines like insulation, like large power transformer, like GIS etc.
In that of course there are also some capacities available in automation and other things.
Sri Om Kapoor
Understood. Thank you so much.
N Venu
Thank you.
operator
Thank you. Next question is from line of Sarbamayan from SBI Life insurance. Please go ahead.
Sarbamayan
Thank you. Sir. Sir, if you can share what is our export orders X of HVDC in our order book and how are the margins in that visa with our domestic orders?
N Venu
Yeah, on the segment wise, on the. On the category wise. Mr. Subramania, so what we can say that our exports are roughly. Exports are roughly as part of our backlog.
You want you’re talking about or what are you talking about?
Sarbamayan
Sir, I’m talking about the export orders X of HVDC in our order book. What would be the percentage of that backlog?
Sarbamayan
Yeah. Yeah, right.
N Venu
Yeah. If you. If you talk about X exports X of HVDC in our order backlog is roughly another in the. In the same range.
Sarbamayan
20%, right?
N Venu
Yeah.
Sarbamayan
Okay. Okay. And so if you can share some bid pipeline X of HODC in the domestic as well as export. What we are looking at it for the year
N Venu
pipeline numbers we don’t share. What we have been saying is that without HVD pipeline is very strong in the industries.
In the transmission, in the renewable, in the data center, in the railroad. And also the pipeline is very strong in our exports as well.
Sarbamayan
Sir, if you can share the at least growth number vira with last year how is the pipeline looking?
N Venu
We are not shared so far.
Sarbamayan
Okay, great. Thank you sir. Yeah,
operator
thank you. Next question is from line of Harshit Patel from Equator Securities. Please go ahead.
Harshit Patel ·
Thank you very much for the opportunity. Could you give us an update on the Mumbai Ahmedabad HSR electrical package? When will it get tendered and how large is this opportunity size for us?
N Venu
No, see again the whole project I’m not sure how it is taking different turns or things like that.
But we also do not have visibility. We have received couple of orders for some transformers but then an overall basis we don’t have a visibility. We are still discussing with our customers. We don’t have any timeline for that.
Harshit Patel ·
Understood. My second question is on the Statcom have we started any kind of manufacturing or assembly integration for these systems in India? What are our plans to increase local value addition in this
N Venu
.com we do everything in India. So we are. We’ve been doing all the STARTCOM projects which we have got. And in India you do the valves, we do the transformer, we do the complete engineering everything.
Harshit Patel ·
Just a small follow up to that. What is the overall opportunity size for STATCOM in India in the next four to five years in your assessment?
N Venu
In our assessment there are, you know you can also go to the Nepal the national activity plan from the CEA and you can check yourself also anywhere between you know 25 to 30 projects in the next four years.
Harshit Patel ·
Perfect. Thank you very much for taking my questions in. All the very best.
operator
Thank you. Next question is from Leno Prateek Singh from Helios Capital Management. Please go ahead.
Pratik Singh
Yeah, thank you for the opportunity.
Sir, just a quick question. Was there any execution miss in 1Q or any potential delays in execution which we face because X of other income, our execution, I mean the top line growth considering the order book which we have looks slightly softer at 10 11%. Sorry. Revenue growth 15% excluding the other income. I think the Core top line growth looks tad softer at even 12%. So just wanted to check if there are any execution delays which we had in one case.
N Venu
No, you know, I don’t see any major execution delays. You know, in any of those projects there will be always, you know, with such a big large portfolio, you’ll always have one or two delays but not any major delays.
Pratik Singh
All right, thank you sir.
operator
Thank you. Next question is from line of Abhijit Singh from Systematics group. Please go ahead.
Abhijit Deshmukh
Thank you for the opportunity. Sir. My first question is.
operator
Abhijit, you’re not audible. Can you speak a little louder please?
Abhijit Deshmukh
Is it better now?
operator
Yes, go ahead.
Abhijit Deshmukh
So first question is if we compare HVDC and non HVDC transmission project, what is the difference? So one is, you already mentioned that in terms of execution, I think the time taken for an HVDC project is almost 2x about 54 months versus about 24 months for a non HVDC one.
So in terms of product service and project bifurcation and not going into technical part of it, if we can differentiate between an HVDC and a non HVDC project,
N Venu
HVDC and non HVDC project, you know, from a complexity standpoint, both are same for a developer. So developer, for example, if he has to do HVDC project, it takes 40 months. If he has to do a non HVDC project, it may not be that much time, but it will take thing. If you talk about including the all the row etc. From an equipment supply standpoint, it’s a developer because for equipment supply standpoint HVDC we need to also do a lot of system studies, etc.
So engineering those things will take pretty long time compared to a pure vanilla transmission process like a 400kV project, 220kV project. There what we do, we supply, you know, 400kV transformer, 220kV transformer. If you do a system basis, we do, you know, design engineering which in 18 months, you know, you can complete anywhere between 765kv substation to 400k substation. Right. So that, that’s how the thing is that.
Abhijit Deshmukh
Sir, can we, can we quantify the service component in the HVDC project?
N Venu
No service component there in everywhere. We’re not able to quantify service see everything. Yeah, everything will have
Abhijit Deshmukh
in HVDC service component which will definitely be significantly higher compared to a vanilla.
And, and therefore you know, designing and engineering and everything will be much more intense. So from that perspective. Yeah,
N Venu
no, you’re right. But we will not able to quantify, you know, what is the service thing in there for us. A particular system or thing which includes product supply, design, engineering and also election testing, commissioning if you have in our scope. So that’s how you know we quantify the whole portfolio. Look at the portfolio as a whole, you know, portfolio which includes designing, product supply and also commissioning. Things like that. Yes, you are right. For a HVDC it is slightly higher but it is not that major compared to other projects.
Abhijit Deshmukh
Right sir, also you mentioned in your comments that in the next few years or after few years you are expecting about two to three HVDC projects per year in India. Yeah, I hope I heard that correctly.
N Venu
What I’ve said was to manage the complexity of Indian Indian network we need to have you know, two to three HVDCs per year. So that much is my expectation. But if you really look at nep which is almost talking about a two projects per year, the market, the project comes to the market. Whether we win or not, that’s a different issue.
But those projects will be coming, coming for bidding at least two projects per year in the next three to four years.
Abhijit Deshmukh
Understood, sir. So lastly this tenth slide of the ppd, the growth you mentioned of different segments, this is the order inflow growth for Q1 for us. Is that correct? All right, sir. So thanks a lot. That would be it from my side. Thank you.
N Venu
Thank you very much ladies and gentlemen. We’ll take that as a last question and now hand the conference over to Mr. N Venu for closing comments.
N Venu
Okay, so no, I was thinking that we have two more minutes now.
Why don’t you take one more question.
operator
Sure sir. The next question will be from the line of Davan Shah from Alpaca Advisors. Please go ahead.
Dhavan Shah
Yeah, thanks for the opportunity sir. So my question is on the royalty payout. You know if I Compare your royalty versus the G TNT India. So I think GE is paying roughly 1 odd percent. We are paying roughly 4%. I can understand. And you know we are getting the superior technology and everything which helps us to build for the complex projects. But just suggestion I think can we do it or not? I’m not sure.
But can we reduce the royalty payment and increase the dividend payout Given that, you know, even though you will increase the dividend payout, Hitachi parent itself holds 75 stake. So they will get, you know, the more the lost money whatsoever from the royalty through dividend. So can we do that kind of arrangement?
N Venu
Thank you Mr. Dhawan Shah, thank you very much for your thing as you Know, we are, we are a company, a global company and we don’t do any, any financial engineering on a short term or midterm basis. Let me again tell you what, what is important for, for the royalty to.
As I said, I don’t want to compare with others. You may be comparing only short term basis, but we have a lens not only short term, midterm and long term. Okay. So if you look at from that, then you understand after some time why I said the technology, what we are developing, we are by far the world leader. And that technology is available at a 4% cost. If you want to develop that, that’s not possible. In that today, whatever we have able to, we were able to win is mainly we are able to localize a lot of the technologies here and there.
So it’s important that you know, we continue to pay and develop the new technology. The new technology is not only on the, on the hvdc. The new technology is energy storage. The new technologies is on the synchronous condenser. The new technology is our, you know, automation. There are many things are happening, right? So those technologies, we need to invest continuously on that. Whenever the technology is complete and it is available for a commercial use, any part of the world, it is available to us. And that’s a big thing from shareholder standpoint that it is available and we are able to offer and you will see more such things in the coming quarters.
What I am talking about, it is very important. We will continue to invest in the technology, we continue to pay the royalty so that we are able to access the technology and put our company far ahead of that. Yes, we are working on the margins and you have seen the improvement and it will continue to be improved going forward.
Dhavan Shah
Thank you. Understood, sir, Understood. And one question is on the admin cost, even if I compare the admin cost, it is still higher for us compared to the peers which is roughly 4 or 5% for us compared to 1, 2% for the other competitor.
So any room for improvement over there? Because that is more or less fixed cost. You know, despite, despite our revenue size is more or less the same at the moment. And there is still, you know, difference in terms of the admin cost they are paying. They are having lower admin cost versus us. So any for improvement over.
N Venu
So those things also some of these costs are as a percentage. It will continue as a percentage. But some are fixed cost and that has been converted into a percentage. And as our revenue goes up in the coming years, so those things will as a percentage, it will come down, so you will see later on.
Thank you very much.
operator
Thank you very much.
N Venu
Once again, big thank you to all of you and thank you for taking time from your busy schedule and attending to that. And if you need anything, please reach out to us. Happy to engage with you. And we are in what we call an energy super cycle, super excited and with a growth opportunities both locally and globally and looking forward to working very closely. Thank you very much.
operator
Thank you very much on behalf of Hitachi Energy India limited that concludes this conference. Thank you for joining us and you may now disconnect your lines.
Thank you.