Hitachi Energy India Limited (NSE: POWERINDIA) Q3 2025 Earnings Call dated Jan. 30, 2025
Corporate Participants:
Nuguri Venu — Managing Director & Chief Executive Officer
Ajay Singh — Chief Financial Officer
Poovanna Ammatanda — General Counsel & Company Secretary
Analysts:
Subhadip Mitra — Analyst
Parikshit Kandpal — Analyst
Mohit Kumar — Analyst
Mohan Krishnaswamy — Analyst
Vinod C — Analyst
Ruchita Pareek — Analyst
Vimukta Shah — Analyst
Yash Mehta — Analyst
Sagar Gandhi — Analyst
Prathamesh Rane — Analyst
Varun Basrur — Analyst
Presentation:
Operator
Ladies and gentlemen, good evening and welcome to Hitrachi Energy India Limited’s Q3 FY ’25 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 the conference call, please signal an operator by pressing star then zero on your touchstone 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 Limited. Thank you, and over to you, sir.
Nuguri Venu — Managing Director & Chief Executive Officer
Thank you, Michelle. Good evening, ladies and gentlemen. Thank you for joining us for the analyst call. I hope you’re all doing well. Yesterday, we announced our results for the 3rd-quarter for the financial year ’24-’25. Over the next 2025 minutes, I will take you through the — our performance during this period ending December 31, 31st 2024. We have uploaded the presentation on the stock exchange and for your convenience, I will read-out the slide numbers in case you are following via phone. With me in the room today, I have our CFO, Ajay Singh; General Counsel and Company Secretary, Poovanna Ammatanda; and Head of Communications and Investor Relations, Manashwi Banerjee. The quarter-ending, 31 December 2024 reiterated our constant efforts towards efficiently delivering on the energy transition. This resulted in the highest-ever quarter order intake and record order backlog, along with improved margins and collections for the 3rd-quarter of ’24, ’25. Despite the national signs of subduing economic momentum, we believe that the just to accelerate the energy transition will continue, adding more rigor to the energy segment and having a positive trickle-down effect in the coming quarters — quarters. Moving to the slide, slide is not moving yeah go to Slide number three as you all know at Energy, we actively manage the health, safety and environment aspects of all our activities. Our performance in these areas is integral to our overall sustainability plan and aid in our focus of advancing a sustainable energy future for all. We continued our efforts towards strengthening our safety practices and employing well-being through multiple initiatives during the quarter. On the safety front, to ensure proper implementation of life-saving rules across our offices, factories, we conducted more than 500 on-site inspections. Our annual agency week-in November highlighted our need to constantly do the right thing, including reporting safety incidents at working sites. Such continuous — continuous reiteration has helped achieve almost 10% — close to 99.49% on-time closure of our situations. In addition to safety, we organized multiple awareness, training sessions and health camps across our offices, factories and project sites. We had sessions on mental health and stress management and training on how to give and ergonomics including wild material handling. Furthermore multiple health camps and animal health checks were concluded moving to Slide number 4. Our efforts in reinforcing safety was recognized by patterns across industries and geographies. On the left, you can see some examples from our key customers. Sustainability and safety are two cornerstones of our day-to-day activities across all of our functions. In our constant endeavor to adopt and implement best energy practices, we have undertaken various measures during this quarter to reduce our carbon footprint and ensure better water and waste management. As part of this, at our factory in Malayja, in Gujarat, we installed 930 kilowatt solar plant and have started using five natural gas in the. We also have installed a retrofit emission control device from existing diesel generator at our facility. Towards water management, we installed water metal and rainwater recharge wells at our and facilities. Furthermore, we are now using 15% of treated water for watering purposes at and keeping track of water recharge wells at. We also took a slew of measures for waste management such as plastic segregation, recycling, reusing oil equits as refused derived fuel at our Maneja facility. So becoming a sustainable in our own operations is critical in helping our customers become sustainable in their operation and it is heartening to mention that we also be in comfort a green leader certification in responsible supply Chain Assessment for ESG practices. Moving to the next slide, slide number five, as you can see, the company reported its highest-ever quarterly order intake of INR11,594.3 crores for the quarter three with a year-on-year growth of 138% on the back of HBTC order to transferenium energy from in Gujarat to Nagpur in Maharashtra over a distance of 1,200 kilometers. Revenue was up 31% year-on-year to at INR1,672 crores for the quarter on a favorable execution mix and improving operational efficiencies. In addition to this, notional forex exchange gains on export order delivery pushed profit before-tax up year-on-year to INR184 crores. Profit-after-tax is up nearly 5 times year-on-year from a low-base of low-base at INR138.2 crores. During the quarter, the company also recorded its highest-ever order backlog of INR18,994.4 crores, providing revenue visibility for several quarters. For the more, concentrate focus on collections of food, which in addition to the advance from HBTC project has led to a solid cash position and the company becoming a debt-free as of December 31, 2024. Some of the key orders in the quarter, as you can see right-side of the slide, renewable 40 frustration, thermal generation, 18 into 40 orders, industries 20 substation, metro rail multiple transformer order for deploying in a Bangalore Metro and rail, we have ICF, 120 subtraction transformer, data center, several transformers and orders. So it’s a combination of orders, not only from utilities, but the renewable industries, rail, infrastructure and data centers. Moving to the next slide, Slide 6, I think this slide me, while several industry estimates indicate a slower-growth with GDP growth in FY ’25 revised downwards to 6.4%. India is on a track to become the third-largest economy by 2030-31. Its energy targets remain intact as the country marches towards its net zero goal and energy investment gained momentum across verticals. The renewable generation sector in India is set to attract close to INR18.8 lakh crore and the national luxury Plan outlines an increase in the country’s power transmission capacity by 35% by 2032 with an estimated investment of INR9.16 lakh crore. India’s data center market value is expected to touch close to $6 billion to $7 billion by 2027 at a growth rate of 12% to 14% CAGR between 2024 and 2027. The country’s railway modernization is on-track as the Indian rails have utilized 76% of its allocated budget so-far in the year ’24, ’25. These expected and committed investments reflect the country’s energy segment’s growth trajectory for the immediate and upcoming future. Moving to the Slide number 7, with this backdrop, Energy continue to work with our partners, customers to advanced energy security through various projects. During the quarter-ending, 31, 2024, we commissioned projects including two to integrate renewable into the grid 400 KV, 375 megawatt substrate in,, 600 megawatt substation, solar integration 600 megawatt substation in NHPC in Baya, Rajasthan, just to say a few examples. Moving to the Slide 8. Transition to clean-energy to advance the sustainable energy future for all is one of the most pertinent challenges of our time. We and Energy are committed to accelerating the pace of this transition of important forums, collaborations and internal engagement. This quarter we contributed to thought leadership and technology sessions in the CIA Karnataga Summit where we emphasized the importance of concentrated efforts to accelerate the country’s energy transition by adopting ESG practices. The Energy team had a great opportunity to participate in growth plan where as part of focused discussions on IT and IT-enabled services, segment development through strategic research, technology, transfer and skill development in the state. Our customers are our growth partners, so there has been a regular effort to extend industry knowledge. Towards this effort, we conveyed the power system communications User 2024 and organized a comprehensive technical training program on HBTC and at our senior and Manager facilities. Also a technical seminar on a transformer OLTC and was ranged for Bhutan Power Limited applications. Such 360 degree efforts are made as the preferred partner for the multiple nation building projects during this quarter, our Transformer business unit rolled-out the 11,000 locomotive transformer as part of an order placed in 2017 to supply 600 units. This transform was manufactured at our facility. Furthermore, we continue to hold multiple employee engagements on various topics from to learning. Moving to Slide number 9, it was a busy quarter to say the least, in October we culminated our mega event Energy and Digital World 75, which witnessed over 2,500 attendees from customers, government academia, analyst and media. Here we announced our plans of investing INR2,000 crore in India over next four years for expansions, capacity building and talent attraction. In November, we backed a large HVDC order to transfer renewable energy from and Gujarat to the industrial Center of Nagpur in Maharashtra which has boosted our order books at all-time high and our order backlog end of 31st December stands close to INR19,000 crores. As to a long-tail opportunities created by the energy transition, we have to become the number-one provider of services. In our ambition to enhance customer experience with strengthened and future focus for this system globally, they work towards a new service business unit from the coming financial year of ’25, ’26. So this is going to be our fixth business unit in existing — existing four business units and this is a new business unit, which will start from 1st of April. Moving to the next slide number 10, this is about Sauda, Nagpur. As you’re aware, PGCL awarded a large orders to the consortium of Energy India Limited and BHEL. The order includes design and execution of 800 KV plus-minus 800 KV, 6,000 megawatt and bidirectional to transfer renewable energy from and Gujarat to the — to Maharashtra from the potential energy zone in of this 1,200 kilometer leak will feed into the country’s 500 gigawatt renewable evacuation and interstate transmission system under development. The further scope includes converter transformer, control and production, high-voltage switchgear,, 765 substation systems to be delivered by us and our construction partner BHEL. Moving to the slide 11, with an aging installed-base, our objective to drive energy transition and evolving workforce and systematic organization shift to digitalization solutions, we have enormous opportunities for the service segment ahead of us. Establishing a service business agent is the first step to develop service and digital proficiency and unify the customer service experience. With the new business unit coming into existence from the 1st of FY 2025, the Imminent India business focus is to tap through the existing installed ban base of approximately INR80,000 plus crores. In order to maximize our reach, all the business units will closely work with the service business unit, shaping an end-to-end service opportunities in that. Moving to Slide number 12, to provide some more color on the orders received this quarter. Orders in the transmission segment grew with and without loss orders. Orders from industries were up about 60% year-on-year, while data grew sixfold on a low-base, renewables saw a significant year-on-year decline of 68%, but we believe this is a seasonal decline with the aggressive push for renewable generation in the country. We expect significant demand from the segment in the coming quarter. On the right-hand side, you see the order mix segment-wise projects lead with HVDC orders without HVDC, it is a product. Sector-wise utilities are cleaner winners for both with and without HVDC orders, whereas on the channel side, direct end-users take the lead with HVTC orders and without the EPCs that take the lead. Whereas the channel side, direct end-users lead with HETC order and without its EPC, which takes the lead. So moving to the next slide, our value creator, our growth driver, service and export. This quarter services contributed 11% of our total orders excluding. We have secured repeat service orders from major steel producers that are to digitalize transformers, life-cycle services for the transportation and scaled our system upgrades across, industries and real-estate. Additionally, we received renewable study orders from a large domestic and global players. We also fulfilled space and control related channel extension orders from equities and program focused on digitalization. So the income for capacity is an agreement. Including the one-time loss orders, the share of exports grew to over 40% of total orders in the quarter three. Key orders include 333 KV, 430 order from Central West project and AS equipment order from PL Indonesia after 70 KV, 170 KV at 50 KV, 2 45 KV and one for each equipment from, Azerbaizan. We also received an order for an 800 KV front transfer from Canada for hydro. So there is quite a lot of momentum on our export strategy, which is playing very well across the geographies, which we targeted in the plant. I now move to the next slide, slide number four and hand over to our CFO,.
Ajay Singh — Chief Financial Officer
Thank you,, and good evening all. Hope all of you are doing well at your end. So you see our constant effort towards improving overall operational efficiencies have helped us to maintain growth momentum in this quarter — quarter three. So you see during the quarter, the company reported its highest-ever quarterly order of INR11,594 crores, which is up by 838 percentage Y-on-Y. The revenue also went up by 31% Y-on-Y at INR1672 crores on the back of favorable mix and a good order execution during the quarter. In addition to the favorable exception mix, there was a notional forex gain on the export order delivery that helps basically our profit before cash to INR184 crores in this particular quarter. Profit-after-tax also went up more than 5 times compared to Y-o-Y and it stood at INR137.4 crores. Operational EBITDA to see for this quarter stood at INR168.9 crores, resulting in a double-digit margin of 10.1%. So at the close of December 31st, the company recorded its highest-ever order backlog of INR18,994 crores, providing a revenue visibility of the most in the coming quarters. If I go to the next slide, Slide 15, I would like to share an update on how the numbers feared during this particular quarter and let me walk-through the particular specific slide in Ditesh. Here you see the other income, if you see exchange commodity gain, which you are talking earlier, is INR51.9 crores and that is now our total income is INR1,672 crores for the quarter. Net cost were 59.2%, personal expenses 8.4%, other expenses remained consistent 19.3% and basically depreciation was also consistent 1.4%. Finance cost compared to the previous quarter and earlier quarter has come down because of the average borrowing has gone down. So that has resulted in the lowering of the finance cost and this has basically helped us to secure profit before-tax of 11% and profit-after-tax of 8.2%. With this, I hand over to Venu for the few replace.
Nuguri Venu — Managing Director & Chief Executive Officer
Thank you, Ajari. And now I move to the next slide, the last slide number 16. Yeah slide number 16. With the closing of quarter of FY ’24-25 all our efforts are channeled towards carrying the growth momentum not only for the last quarter, but also into the new financial year. In order to maintain the growth trajectory, the company will focus on maintaining its — its leadership in core segments, including utilities, HVDC, along with strengthening our presence in the segments like data center and industries. Furthermore, a concepted effort will be made toward accentrating export and digital contribution to the company’s overall growth. From a business standpoint, we are stepping to lay the foundation of our new service business in India and leverage the largest-ever backlog for revenue, profitability attrition. The focus of improving the overall operational efficiency to boost productivity and quality continues. On the function side, there will be no let-off in our endeavor towards creating a robust safety culture as it is interest in our DNA, we remain agile with an eye on upskilling, riskilling and holding capabilities that can start the test of time and meet today’s and future energy requirement. So with us, ladies and gentlemen, I close my presentation and open the channel for questions. So operator, can you please open the channel for the Q&A.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask questions may press star and one on their touchtone for me. If you wish to withdraw yourself from the question queue, you may press. Participants are requested to use only 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 Subhadip Mitra from Nuvama. Please go-ahead.
Subhadip Mitra
Good afternoon and thank you for the opportunity. Firstly, I would like to congratulate the management for a great set of results and entering double-digit margins earlier than guided. So congrats on that. Thank you. So my first question is with regard to the SVDC order. Would it be possible to outline what would be the size of this order in your order book?
Nuguri Venu
No,, we told last-time also, we don’t like to give exact numbers. As you know, similar projects are also ongoing, so we don’t like to give exact number on that.
Subhadip Mitra
Understood. Also, we amount that has got included in your order book, would that be after excluding the quantum that goes to BHL?
Nuguri Venu
Yes, of course. BHL saying we don’t book, right? We quarter of our order.
Subhadip Mitra
I’m sorry, sir, I couldn’t hear you clearly.
Nuguri Venu
I think the portion is not booked in our books. Our books, what is there in this is pertaining to our order.
Subhadip Mitra
Perfect, perfect. Understood. Understood. And am I correct in understanding that most of this would be indigenously manufactured with a lower import component?
Nuguri Venu
Yes. You’re absolutely right.
Subhadip Mitra
Okay. Secondly, with regard to the upcoming three HVDC projects, the project, and. Would you be assuming that most of these would get ordered out over the next 12 months? And are you participating in all three of them?
Nuguri Venu
As I said, we have — just to give a background on this HVTC technology, this technology has been invented by us when we bought 70 years back this year not this year last year as we celebrated the 75 years in India and HVDC technology, we celebrated 70 years globally. Today, globally around 150 gigawatt worth of the links run-through our technology. In India, including the one which we have a — we have received loss this quarter that is Nagpur total is 16 HVDC links out-of-the eight links runs with our technology. So that is a kind of invention and continue to invest in the technology to ensure that we remain close to our customers. And as you recall, we have seen this thing coming in and we have managed — we have opened our manufacturing facility, especially in Chennai, and we have end-to-end capabilities doing that. So we will try and participate as many tenders as possible with that. So our view of the two tenders which you’re talking about once tenders might get finalized in the next six months or so. And one more tender may and maybe the last quarter of the fiscal year — estimate new fiscal year. This is our assessment. But as you know, it’s a — it depends upon the customers’ and there are many other, et-cetera.
Subhadip Mitra
Understood. Understood. Last question from my side, sir, with regard to the QIP that you have announced, if you could also outline what would be the usage of the funds?
Nuguri Venu
Yeah we will come back on that because we just want to give a — we’ll come back on that. We’ll answer that question get reports. As you know, just you recall during October last year during our EVW, we have announced a INR2,000 crores worth of investment and is basically for the future growth and capital expansion we announced in October 2024, significant capacity expansion for our transfer factory, upgraded facilities, testing facilities and also the capacity of the traction transformers and company’s network control and also for — that’s what we announced. But in addition to that, uses of the funds are also from short and long-term working capital requirement and strategic initiatives expansions. As you know, this is an enabling resolution. So we basically you know, gives the — it gives — it enables the management to be ready and whenever it is needed. Thank you.
Subhadip Mitra
Understood, sir. Thank you so much.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go-ahead.
Parikshit Kandpal
Yeah, hi,. Congratulations on a great quarter, sir. So my question is again on HVD. So is this entirely done by the Indian entity or is in partnership with the parent entity?
Nuguri Venu
So this is done by entirely by the entity.
Parikshit Kandpal
And what will be the import content in this?
Nuguri Venu
There will be — we will be importing some parts like semiconductors which we require for that and you know again when you talk about the import kind of for example, the transformer, you also import the. So we need to look at those kind of things in that. But at least 80% to 90% of the products we manufacture here in the locally in our factories.
Parikshit Kandpal
Okay. And the question is on the fund-raise. So you — while you had detailed it out. So INR4,200 looks to be a very big number when you compare with the INR2,000 crore capex. So — and generally, we have seen your gross loss of about 1,200 and 5 times you’re running on asset turns. So this potentially could be almost INR20,000 crore kind of a revenue potential. So which looks to be very large. So is it — does it include some part of capacity allocation from the global current for the export markets or this will largely be for the Indian HVDC market.
Nuguri Venu
As we said, as we also mentioned in our stock exchange disclosure on 18th of January that we are — the Board of Directors have approved the proposal for raising points funds up to INR4,200 crores, right? So — and this is an enabling resolution that will give us the flexibility to manage the capital structure of the company and react to any potential initiatives that might require capital. And we believe that it is prudent for us to take such an enabling resolution. Having said that, I also told in previous question that this is part of that we already announced in October 2024 what we want to do, where we want expanding it. And we’re also looking at — and these expansions are not only in HVTC, but also in the transformer, HVTC, our high-voltage businesses. It’s for the domestic business as well as some part for exports in that. And this fund also will be — can be used also for our short-term and long-term working capital requirements, strategic initiatives, capital expenditure for M&A and other-related activities. And some of things can be also used to repayment of prepayment of debt servicing any present or future debt.
Parikshit Kandpal
So this will be entirely fresh issue, right? I mean, there won’t be any reference. So this does not include any office coming into that.
Nuguri Venu
We will not like to comment on that. What we have already notified, I think please refer on that we not like to comment on that. I mean, as I said is enabling resolution. So we not, we decide that time you let you know on the timing, etc., but right now, it’s an resolution.
Parikshit Kandpal
Okay. Sure, sir. Thank you.
Operator
Thank you. The next question is from the line of Mohit Kumar from ICICI Securities. Please go-ahead.
Mohit Kumar
Yeah. Good afternoon, sir, and thanks for the opportunity. My first question is on the — it looks like from the order inflow, see that order was driven primarily by export and HVDC. So can you please comment on the domestic order toning HPC, HVDC?
Nuguri Venu
Yeah. So yeah, I think now if you look our orders growth is primarily driven by HBTC, you’re right. But if you exclude the HBTC order also, our base order growth is also double-digit in the quarter. And that growth has maybe fueled from partly export, but also domestic. As I said, domestic we have data center and industries, all those things are complicated for our global as well.
Mohit Kumar
So the question was — I was asking the question because there is a lot of activity in the domestic transmission, right? And so to that extent, the last quarter seems to be a weaker side. Just asking how do you see this panning out as you go-forward?
Nuguri Venu
Sorry, I didn’t get you also waiting in this year.
Mohit Kumar
Given that large activity in transmission side in FY ’24 and YTDF ’25, it seems like there is a delay in or delay in awarding from the — from the — from the projects. Is it — is it fair to assume that this will pick-up as we go-forward?
Nuguri Venu
I think first of all, we are not seeing that there is a — there may be slight delays, which is expected, but it’s not a major delay in awarding those some of the some of the projects and we believe that at least from our perspective, the pipeline is very robust and we see customers are finalizing, finalizing orders.
Mohit Kumar
Understood. My second question is, what is the timeline for execution of HVDC and ARPU and how does the revenue booking happens over the contact duration? Is it fair to say that booking will be back-ended?
Nuguri Venu
Sorry, sorry, what it is there.
Mohit Kumar
Sir, my question is what is the timeline for execution of HVDC?
Nuguri Venu
Yeah, it is 48 times 54 months contractually 48 months is a bifol 1 and 54 months is a bifol 2, that’s our contractual.
Mohit Kumar
And how does the revenue booking happen? So was the contact duration? Is it lower initially then it picks up? Is it fair to say the booking will be back-ended?
Nuguri Venu
Yeah. It is low for sure. The first 12 months is a low, but then next 12 months and of second year and third year, we’ll have a bulk of the revenue coming in.
Mohit Kumar
Understood, sir. Thank you and all the best, sir. Thank you.
Operator
Thank you. The next question is from the line of Mohan Krishnaswami, an Individual Investor. Please go-ahead.
Mohan Krishnaswamy
Yeah. Hi, thanks for the opportunity. My question again is on HVDC side. I just wanted to understand the differences in the technology offered in the market, both the VSC and the LCC because one of your leading competitors publicly mentioned that the VSC technology which they are exclusively operating in is superior to the LCC technology, but perhaps most of the bids in India is on the LCC side. But I also noticed that the Adani order, which was awarded to us 2 years — 1.5 years back was on the VSE technology, which means we are fairly strong there as well. So any color on what is the preferred basis in India and why it is preferred would be useful, sir.
Nuguri Venu
So thank you, Mr Mohan, for the question. I’ll just add-in the beginning, let me reiterate once again, the HVDC technology has been invented by us 70 years back, okay. And this technology today, both and LCC put together 150 gigawatt worth of lines we are running around the world. And this technology we need to — we have been investing and continuously both LCC and BSC. And this technology needs to be — continue to invest it, continue to localize it, continue to develop the skills to execute this project. It’s a very complex project. Once you have end-to-end capabilities, then it is easy to execute in that. That’s exactly what we did. So as far as the — any technology concerned, whatever the customer choose, we have a very competitive I would say, in our perspective, we have a very competitive, comprehensive offerings to our customer, whether LCC or VSC. Having said that, in a country like India where you are talking about transferring 6,000 megawatt in a one link, the LCC makes more you know cost-effective compared to the VSC technology. VSC technology has a limitation from a technology standpoint to transfer 3,000 megawatt or more. You need more of this required requirement to be done in there. But as I said, end-of-the day, we leave to this to customers to — we will offer both the things. We have the complete end-to-end capabilities in India to whether it is LCC or just for information, as you rightly said, it’s the Mumbai project, which is completely executed from this — from India on the VSE technology.
Mohan Krishnaswamy
Yeah. And sir, my just second question, thanks for that answer is on the larger potential, now today, India has about 33,000 megawatts of HVDC transferring capacity. When you compare that to, say, China, China is close to 300,000 megawatts and our own power demand is running into capacity is 4 lakh megawatts. So where do you see this number growing? I mean, you think it’s a multi-decade opportunity where we are just about 33,000, maybe adding another 30,000, 33,000 in the next five, six years. Can it keep growing because we will increase the share of HVDC of the total capacity line.
Nuguri Venu
So I believe so is my view, I was articulating this at least for the last two years or three years that India is to have a one HVDC project for every four or five years. But today, the need of our is one project per year and then now the need of our is not one, but two projects per year. So it is completely evolving it. We need more-and-more HVTC links to ensure that anywhere you produce the green and green energy, you are able to transfer to the load center very seamlessly at the same time, ensuring that the grid is robust, flexible and secure and this technology plays a major and vital role. And you talked about in China, I don’t have the of the hand to give you that absolutely, compared to any place, we have to have many more links going-forward in that and that’s why we are investing. We are investing in our factories, we are investing in the capacities. We are investing in the people as well.
Mohan Krishnaswamy
Thanks a lot, sir.
Operator
Thank you. We’ll take the next question from the line of Vinod from PhillipCapital. Please go-ahead.
Vinod C
Yeah. Thanks for the opportunity and congratulations on a great quarter, sir. Just to again harp on HVDC. You have a 50% market-share in India and I believe globally also you have a similar market-share. So what is it that makes ABB or rather Hitachi stand-out in? Like what is your offering — how is your offering stacking up against what the competition is offering? I think globally it’s basically GE Vernova and Siemens, which are offering similar products on the DC side. So what differentiates Hitachi? Is it your localization drive or can you just elaborate on what makes you use the marketplace yeah.
Nuguri Venu
Thank you. We don’t talk about our competition. We talk about ourselves. So as I said, we have invested this technology and since that we have been investing it, right? One of the things very clearly stand-out is that we continue to invest, continue to bring the value-add, continue to bring — reduce the footprint, losses, everything in addition to the localization, creating the local competency. And those are the things which really stand-out. And on-top of that, our execution capabilities, okay, that also is a very clear differentiation we bring it to our customers.
Vinod C
The other thing is, if you look at the national electricity plan, intrastate is also an equally big component. So do you see DC Technology making any inroad in the interesttate grid as well, what we — other kind of what we are witnessing in the interstate grid?
Nuguri Venu
I think interest depending upon, there are some states are quite — again, it makes every technology make sense, whether it is AIS, ASC, RTC. What we need to look at is a return on investment standpoint. If it is a longer distances or you have a weaker grades, it makes even more you know, commercially viable for those kind of things. I think this is where the thing. But a technology standpoint will work anywhere. There are many examples outside of the world where for a shorter distance as for a lower 1,000 megawatts itself, these people have been using the — this technology because of the inherent and benefits it has.
Vinod C
Sure. Thanks. Thanks for the explanation, sir. Thank you.
Operator
Thank you. The next question is from the line of Ruchita Pareek from iWealth LLP. Please go-ahead.
Ruchita Pareek
Hello, sir. A very good evening and congratulations on a good set of numbers. So sir, my question was mainly on the industry side. So we are seeing that there will be around INR9 lakh crore of investment on the transmission side. So just wanted to understand how much of this will be transmission side and out of — as per the like KV or the
Operator
I’m sorry you ma’am, your voice is breaking. We couldn’t hear you clearly. Hello. Ma’am, use your handset, please.
Ruchita Pareek
Yeah, just one second.
Operator
All right. Thank you. Hello. Yes, ma’am, please go-ahead with your question.
Ruchita Pareek
Yeah. So sir, my question was mainly on the industry side. So you know that there is this investment that we’ve pointed out that INR9 lakh crore of investment on the transmission industry. So on that, just wanted to understand how much of that would be on the substation side? And under that how much would be, let’s say, 765 KV transformation capacity, how much would be for the 400 KV, 200 KV? If you could give a broad breakup of that?
Nuguri Venu
No, I think we don’t have offline the figures now, but if you go to the NAP24 plant, you have the complete breakdown over there in that. So we don’t have in that. So in our view, this INR9.16 lakh crore is basically for the transmission, which includes HVDC transmission, which is include 765, 400 KV transmission, because that’s where-is ISTS comes into picture that.
Ruchita Pareek
But we don’t have like something like how much would be for the substation?
Nuguri Venu
Yeah, I don’t have their numbers.
Ruchita Pareek
Got it. Got it. And sir, just I missed this point, this HVDC project of ours. So by when do we see the execution of it?
Nuguri Venu
Yeah, I already said that, but let me reiterate once again. So the schedule for from the customer is 48 months for a bipol one and 54 months for bipol two. So that’s where we are on-track to complete that. And if your question was on the revenue that also I talked about is that our revenue will start slowly coming up in the first year and then start picking-up in the second and third year and that’s where the revenue comes into there.
Ruchita Pareek
Okay. Understood. Understood. Thank you so much.
Operator
Thank you. The next question is from the line of Vimukta Shah from Goem Lucky Fintech. Please go-ahead.
Vimukta Shah
Yeah. Thank you for the opportunity and congratulations, sir, on the great set of numbers. I have a question there that in the presentation, you showed that strong growth in the data center segment, right. So what is the expected future contribution from this segment in company revenue?
Nuguri Venu
Sorry? No, this is all order. What is the expectation? Yeah. So as I said, we don’t give any forward-looking statements on that. But data center is as we have been also saying for several quarters. This is one of our key growth segments and the data centers are really growing in the country basically by uses of the data and privacy laws, et-cetera. And more-and-more the AI-ready data centers will further add more things just for your information. A query on the chart GPT requires at least eight to 10 times more energy than the Google search and that clearly shows that the data center market is really an upstream in-going forward.
Vimukta Shah
Okay. Okay. Got it. So — and another question is like in the last meeting, I think you had mentioned that you’re also exploring the opportunities in the battery storage side. Can you provide an update or any progress in that area?
Nuguri Venu
Sir, storage. Energy storage is also one of our key initiative. We are looking at it. And we do not have anything to tell you at this point in time. We are looking at-the-market, assessing the market, what are the technologies that make sense and how do we localize those are the things at this point in time, it’s in our mind?
Vimukta Shah
Okay. Okay. And one more last question is like what is the current status of HMDC project, any expected timeline on the needs?
Nuguri Venu
Sorry yeah. Our customers are working on that. So as and when they will do that, we will start that discussing on that at least from our standpoint end of next financial year, coming financial year.
Vimukta Shah
Okay. Okay. Yeah. Thank you.
Operator
Thank you. We’ll take the next question from the line of Yash Mehta from Art Ventures. Please go-ahead.
Yash Mehta
Hello, am I audible? Yes yes. So I had a question on the HVDC order. So how much — how much portion of the HVDC order will be for the service line? Sorry, how much of the portion of the HPDC order will be services?
Nuguri Venu
No, I think right now what services you mean you mean the commissioning or what exactly you mean? You have a commissioning part. Yeah, they don’t tell the exact number on that, but it will be roughly a ballpark of around 10%.
Yash Mehta
Okay, all right. Thank you. Yeah.
Operator
Thank you. The next question is from the line of Sagar Gandhi from Invesco Mutual Fund. Please go-ahead.
Sagar Gandhi
Sir. My question is on yesterday’s press release which mentions then which mentions that there is a cost of its kind thing which has happened, wherein the consulting team has entered into a capacity reserve agreement for nearly year for renewable studies with the customers in decarbonization space. Can you explain this in more detail?
Poovanna Ammatanda
Yeah. So this is part of a contract where they have asked us to allocate resources to help them conduct various renewable studies just indicating how the anticipated growth is in the renewable market. I don’t think we have shared customer name and we will not be doing that.
Nuguri Venu
So — but we need to understand this is a thing where we are articulating that we need to move from a project base to because the energy transition tailwinds are very huge. If we had to meet the deadlines of the customers, it’s important that we need to reserve the capacity for the customers so that we are able to take care in a very efficiently and also you know, bring the synergies between that. For example, if you have — every time you do one-time engineering and you are replicating it instead of that every time you’re doing our engineering and then doing execution and then one more time engineering execution. So the trend around the world what we have seen is that you do one-time and replicate two, three-time projects. You do you desire for one project and execute for two, three projects. With that, what is happening is a whole cycle and efficiencies and also the cost benefits where it can be derived for both the customers and all stakeholders. And this is one example of a capacity reservation where our customer has, you know, as signed with us for certain given period of time.
Sagar Gandhi
So, sir, this is a global customer or Indian customer. I mean, Indian customer, okay. So they — I mean capacity reserve in terms of manufacturing capacity reserve or only your — I mean employees?
Nuguri Venu
Yeah, it is not — it is basically when we are doing a study. So whatever the studies instead of doing one study for every project. So we agreed for we’ll do the studies for one year or something like that.
Sagar Gandhi
Okay. Yeah. Thank you. Thank you so much.
Operator
Thank you. The next question is from the line of Pratamesh from Antique Stock Broking. Please go-ahead.
Prathamesh Rane
Hello, sir. Congratulations on a very good set of numbers. So I had only one question related to your revenue guidance, sorry, your margin guidance. So you’re maintaining that double-digit margin — margin guidance for FY ’25.
Nuguri Venu
Yeah, thanks,. We have been always speaking on the same lines as you see, we are already such the guidance level that we are talking. So we carry the same intention.
Prathamesh Rane
No, sir. Thank you, sir. Thank you, sir. Thank you. You. That’s all what I wanted to ask you.
Operator
Thank you. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go-ahead.
Parikshit Kandpal
Thanks for the follow-up. So when you spoke about excluding HVDC, the order inflow growth is in double-digits. You mentioned — you were talking about Y-o-Y growth, right?
Nuguri Venu
Yeah.
Parikshit Kandpal
Okay. And sir, in this HVDC, it is primarily that you said that 10% will be installations, that means 90% will be the product suppliers.
Nuguri Venu
We don’t call like that. It’s installation, product supply, system engineering, everything is in a. We do not say that it is 10%. I said I’ve just given a figure just wanted to see that what could be the thing the service is bought.
Parikshit Kandpal
But this is classified under project, this will be classified under project
Nuguri Venu
With under project. You’re right.
Parikshit Kandpal
So — but why do you do that by not under products? I mean, why you classified in the projects? And I don’t know.
Nuguri Venu
I think we have a very clear definition of the product. Product means we supply a product and then we obligation gets over, whereas here we supply the product, but then we have to integrate the product to ensure that the system is working there. So that’s but this doesn’t. Does it have EPC portion also? No idea of civil and other things for this.
Parikshit Kandpal
Okay, okay, sir. Thank you.
Operator
Thank you. Ladies and gentlemen, we will take the last question for today, which is from the line of Varun Basrur from Julius Baer. Please go-ahead.
Varun Basrur
Good afternoon. I hope I’m audible. Yes, sir, please proceed. All right. Thanks. Thanks for this opportunity. So just on the order book side, with the exception of page order.
Operator
I’m sorry. What’s your your voice is breaking. I would request you to use your handset, please.
Varun Basrur
Is this better?
Operator
Yes, sir, please, sir.
Varun Basrur
Right. So sir, on the order book side, with the exception of the HDC order, what sort of delivery or execution timeline is there?
Nuguri Venu
Sorry, sorry, but it is there.
Varun Basrur
With the exception of the HVDC order on the order book side, what is the delivery of the execution timeline for the order book?
Nuguri Venu
No, as I said, our order books are — it’s depending upon the project has a 48, 54 months, we will complete it. But when complete, we’ll have to start executing around slowly from the first two year and then it will pick-up the second and third year. So that’s why it is a various thing, right? It has the visibility or order book has the visibility for several quarters.
Varun Basrur
Right, but would you say that if you exclude the HVDC order, would the execution for the remaining order book be between the range of maybe two or three years or is it longer than that?
Nuguri Venu
It is at least close to two years?
Varun Basrur
Right, right. So and just second question is that you seem to be sitting on a fair amount of operating leverage as the — as the revenue ramps-up, directionally, I mean, I know you’re not giving absolute margin guidance, but directionally, where would you see the margins trend? Would it be high-double digits, high-teens or mid-teens or you know any guidance from your side would be helpful.
Nuguri Venu
And as we have very clearly mentioned that we are really not be commenting in any forward-looking indications. So we remain committed what we have been talking and we go step-by-step, but that is how we proceed. Yeah. But having said, that’s our effort of all these things to ensure that we improve on everything, all KPIs, right? So that’s exactly our endeavor. Of course, what led to-market.
Varun Basrur
Yeah. Thank you. Thank you for that. Thank you.
Operator
Thank you. As that was the last question for today, I would now like to hand the conference over to Mr. N. Venu for closing comments. Over to you, sir.
Nuguri Venu
So thank you very much for taking time from your busy schedule and attend our conference call. And thank you for your trust and faith and we’re really looking-forward to receive your feedback. Should you need any information, please do not hesitate to reach-out to us and we are happy to engage. And thank you and take care, stay safe.
Operator
Thank you, members of the management. On behalf of Hitachi Energy India Limited, that concludes this conference. We thank you for joining us and you may now disconnect your lines. Thank you.