Hitachi Energy India Limited (NSE: POWERINDIA) Q4 2025 Earnings Call dated May. 15, 2025
Corporate Participants:
Unidentified Speaker
Nuguri Venu — Managing Director and Chef Executive Officer
Ajay Singh — Chief Financial Officer
Poovanna Ammatanda — General Counsel and Company Secretary
Manashwi Banerjee — Senior Vice President & Head of Communications
Analysts:
Unidentified Participant
Mohit Kumar — Analyst
Umesh raut — Analyst
Bhalchandra Shinde — Analyst
Nikhil Vandali — Analyst
Mahesh Bendre — Analyst
Haji Patel — Analyst
Renu Baid Pugalia — Analyst
Ashwini Sharma — Analyst
Bharat Shah — Analyst
Amit Agicha — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Hitachi Energy India Limited Q4F525 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 touch tone 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 Sir .
Nuguri Venu — Managing Director and Chef Executive Officer
Thank you very much. Good afternoon everyone. Thank you for joining us for the MLIST conference call. I hope you’re all doing well. And yesterday, as you know, we announced Our results for Q4 and the full year 24:25 and in the next 20:20 minutes or so I will take you through our performance during the period ending March 31, 2025 and we have uploaded the slide deck. For your convenience I will read out the slide numbers and I have with me today our CFO Ajay Singh, General Counsel and Company Secretary Mr. Poovanna Ammatanda and our Head of Communication Ms. Manashwi Banerjee. As always, you can follow the presentation and the webcast or by downloading it from the stock exchange. I will mention the as I said slide numbers as we proceed. At the onset of the fiscal year, our focus remained on balancing the operational complexity and efficiency to preserve Hitachi Energy India’s growth momentum. And I’m happy to inform you that we have sustained growth momentum and recorded highest ever auto backlog of 19,245 crores at the year end 31st March 2025. Our strategic approach and adaptability to the rapidly changing global economic landscape has helped us to sustain growth momentum through the financial year.
And FY2425 was a special year for us as the company also celebrated its presence of 75 years in India. At the far end of 2425 we initiated and closed our first Qualified Institutional Placement QIP which I will discuss later as we step into the new financial year. A more robust, comprehensive and collaborative approach is required to realize the sustainable growth for the company in the future. This alliance with our parent company Hitachi’s vision of transforming the group into one Hitachi. With this you will see more synergy and collaboration among the group companies. It will enable us to provide the highest value to our descending customers and partners by offering an expansive portfolio under one Hitachi.
So if I move to the slide number three which is our license to operate, Safety, integrity and quality constitute our license to operate and we never look the other way when we have to deal with this. These are the key fundamentals of our business practices and operations. Our focus on safety has helped to minimize the risk of harm and equipped us to address any untoward incidents effectively and our continued efforts towards strengthening our safety practices have helped us reduce the frequency of injuries over the years. FY2425 we saw a decline of 18% of such incidents compared to the last year with safety woven into our operational fabric in March 2025 we celebrated the 54th National Safety Week across our offices and factories.
The celebration includes a mix of exciting employee activities including emergency response training, safety drills, engaging employees across our project sites, factories and offices. It is not worthy to mention that our discerning customers have acknowledged our constant endeavor towards safety. During the quarter we received several appreciations, letters and awards for safety from our customers from different sectors, industry renewability, utility data centers, etc. In that moving to the slide number four, this is also a very important slide for us. At ETOS Energy, our commitment to environmental conservation is well defined and a clear KPI for business leaders.
The company’s business strategy encompasses conserving the environmental and minimizing the impact of its business on the planet. We strictly adhere to a responsible approach in delivering our solutions to propagate our purpose of advancing a sustainable energy future for all 24:25 we have taken indefinite measures that align with our 2030 sustainability goals retrofits to optimize energy usage. Transitioning to energy efficient technologies along with operational discipline has helped us reduce energy consumption by 6% reduction in total energy consumption for every crore revenue. We have also installed 10 rainwater recharge wells at the complex manufacturing facilities in Maneja Halor which have helped to reduce freshwater usage by 4 percentage and by following sustainable solutions for hazardous waste disposal through recycling of waste and considerably reducing total waste disposed through incineration and landfill, we have ensured a 17% reduction in our overall waste disposal.
On the climate front, we have added 1240 kilowatt rooftop solar energy to our existing 291 kilowatt capability and we maintain 100% fossil fuel activity across all units. Moving to the slide number five, our focused strategic approach coupled with our swift adaptability to the ever evolving global economic landscape has empowered us to maintain our growth momentum. In the quarter under review we achieved 56% year on year order growth amounting to 2,190.9 crore led by energy Transition. Also due to the industry cyclical nature, revenue is also up by 13% year on year to 1,921 crores for the quarter based on a solid out of execution and focus on continuous improvement in overall operational efficiency on a strong execution and a better product mix.
Profit before tax and profit after tax were up by 62.1% year on year at 246 crores and 61.8% year on year at 183.9 crores respectively. The orders we received this quarter followed from multiple segments wherein transmission and renewable led the charge focus on modernizing the grid to ensure a reliable supply of clean electricity across the length and breadth of the country followed by orders from industry on the rail and metro segment. Some of the notable orders include the first made in India variable shunt reactor for the national Transmission Utility, a LOPS.com Order 22033 KV AIs substation for 700 megawatt wind farm automation of 5 substations and 128 traction trucks for railway to mention a few.
At the end of March 31st, 2025 our order backlog stood at 19245.9 crores providing revenue visibility for several quarters. Going back if I move to the slide number slide number six Our focus on continuous effort towards improving the overall operational efficiency has helped us maintain sustainable growth across parameters throughout the year. The same is quite visible in our performance of FY2425 which surpasses last year that is 2324. In all parameters. For the full year orders reached a record of 18,173.8 crores as you can see from the slide up by 228% while revenue stood at 6,475.4 crores up by 23%.
Both PBT and PAT also significantly up by 133% and our EBITDA margin has improved by 250 basis points compared to the last year. As I spoke in the beginning, FY2425 was a special year for us from celebrating our 75 years in India to multiple key milestones. This year we backed the large HVDC order very clearly showing our technology prominence in our HVDC in India and worldwide. We have multiple expansions at our various facilities especially net transformers, interrupters, transformers and valves, also insulating materials etc. Also we successfully concluded our first fundraising initiative through qualified institutional placement which raised 2,500.
Moving to the next slide, slide number seven and I know that you know more than me on this particular slide, but let me give my view on this as per the Organization of Economic and Cooperation and Development Report oecd, the Indian economy will remain one of the fastest growing major economies worldwide. The country is expected to grow at 6.1% for the fiscal year 2526 with retail inflation dropping to 6 year low in March 2025. And you got the latest data even lower gives a strong growth signal while India is comparatively less exposed to the reciprocal tariff.
We really have to wait and see how this will pan out to be, but it will impact various industries whenever it happens. So we have to keep a constant vigil and devise the mechanism to minimize the same and retain the exports Growth Momentum Clock in the previous quarter While the geopolitical uncertainty has posed some challenges, we expect the growth momentum in the energy sector to continue. The government reiterated its commitment to the same by increasing the 52526 budget for the energy sector to 46,550 crores compared to the 19,000 crores of the previous year. With India moving fast to meet its commitment of renewable energy installed capacity, the interstate transmission system expects close to a 1 lakh crore investment over the next two financial years.
Furthermore, the flow of more foreign direct investments, growing investment in Indian data centers for the next couple of years and modernization of Indian Railways will add more steam to the energy sector’s growth in general. Also, the government’s effort to enhance the financial viability of power distribution companies is a positive step that will go a long way in strengthening the country’s energy ecosystem. Moving to the Slide 8 at Hitachi Energy, we constantly endeavor to advance sustainable energy future through all of our projects. During the quarter ending March 31st, 2025, we commissioned several key projects for the several key projects such as renewable transmission industry segments and I would like to highlight few of them.
We commissioned foreign KVA substation for 500 megawatt solar project in Rajasthan, two transit projects, one for establishing 220 KV, 33 KV, 130 KV substations for the development of ISP work in Madhya Pradesh. The second one is in Bhutan for which we provide a 60kV GIS, 33kV GIS et cetera and the last one we also commissioned a 220kV GIS project in Bengaluru for a leading battery manufacturing company in Ghan. If I go to the next slide in the quarter of January March 2020 we have several impressive impressive achievements. We tested our first VSR that is the variable shunt reactor that was designed and manufactured at the Power Transform factory.
With our focus on enhancing the overall efficiency, we have some significant extension and expansion a day extension of press board and insulation kit manufacturing at our MISO facility. As you know, we are in an expansion phase. As and when a particular expansion is complete we are opening it out and we also had a warehouse expansion at the Power Quality Factory in Reddavalapur, Bangalore to help streamline inventories and exports etc. We value our partners and customers. To further strengthen our relationship and exchange ideas on the latest industry trends and development, the company has conducted several technical training sessions and factory visits for them.
I’m also delighted to inform you that our service team has signed its first service level agreement with the world’s largest data center provider for entire DIY Trust Transmodo fleet of various ratings as a service implemented bank Moving to the slide number 10 as a pioneering technology leader we always ensure that we present our views at various forums to create a conducive policy environment for the entire energy sector. This quarter we also made our present site at key industry events and exhibitions such as India Energy Week, the Karnataka Global Investors Meet Electronics and like that and we continue to do so in that I’ll move to the slide slide number 9.
Sorry slide number 11 now to provide some more color on our orders received this quarter, transmission and renewable led the charge with an increasing focus on modernizing the grid to ensure a reliable supply of green electricity across the country. This was followed by orders from industry as well as the rail metro segments. The transmission segment saw a 91% growth whereas the renewables saw a year on year growth of 386% and Railways and Metro is up by 24% year on year. However, the data center and industry saw a year on year decline of 56% and 33% respectively.
But we believe this is a seasonal decline and the timing factor. With the aggressive push for a building data center network and electrication of industries in the country, we expect a significant demand from these segments in the coming quarters. On the right hand side you see the order mix segment wise the product, the lead sector wise, utilities are clear as winner and on the channel side direct end users emerged at the top of it moving. This is of a whole financial year, the previous one more of a quarter one. But if you see the segment wise growth of financial year, the transmission emerges again as the 750% industries on a year on year rise you see industrious growth Whereas the previous quarter you find a decline data center again from year on year basis is the thing.
Metros while the previous quarter was up but on an overall year on year basis is down and the renewable is up in there. If I move to the next slide, service slide number 13 exports and services continue to sustain their growth momentum contributing significantly to the overall order book. Services saw almost 60% year on year growth and exports recorded a significant year on year growth of 77%. In terms of contributions of total orders, Exports contributed almost 37% exporting HVDC and services contributed around 7.4%. It also shows our constant endeavor towards centering our service and export portfolio and we have been explaining this also key to our long term partnership collaboration with all of our customers.
Some of the orders in this segment include grid compliance, power systems, renewable studies for utilities, digital service level agreements, SCADA upgrades, replacement of equipment, annual maintenance contracts, export orders received from across the continent, South Asia, Europe and Africa. Furthermore, foreseeing immense potential in service and maintenance, the company has, you know that introduces service business unit that is the fifth business unit from April 1st, 2025. The unit will provide services to various sectors throughout the asset life cycle from installation to sustainable end of life cycle solutions. With that. So with that let me hand over to our CFO Ajay to take you through the next two slides. Thank you.
Ajay Singh — Chief Financial Officer
T hank you Venu and good afternoon to all of you and hope all of you are doing well. So you see our constant effort towards improving overall operational efficiencies has helped us in maintaining growth momentum in quarter four 2025. During the quarter the company reported one on one order growth of roughly 55.57% with the ILR 2,198.9 crore and the revenue went by 13.1% y and y as it is 1921.9 crore. And this is all because as a result of the solid order execution and focus on the continuous improvement in the overall operational efficiencies, rising on the strong execution and the better product mix, our profit before tax increased by 62.1% y and y at 246.7 crore.
Profit after tax also increased by 61.8%, stood at 183.9 crore. Operational EBITDA proceed for the standalone quarter four excluded 235.46 crore basically resulting in a double digit operational EBITDA of 12.3%. The same emphasizes the company’s constant endeavor towards improving margin and strengthening overall operational efficiency. As we close 3-31-2025 the order backlog stood at 19,245 crores and this provides the visibility of the upcoming quarters. If you go into the next slide and here I like to basically share more details about the quarterly performance and if you see the total income is 1921.9 crores, this includes exchange gain of 19.9 crores.
Our metal cost is 61.6%, the personal expenses are 7.5%, other expenses basically is 16.6%, depreciation is 1.2%, finance cost efficiency is 0.3%. It has come down. As of now we are not having any short term borrowings at the company level and that all these efforts really helped our profit before tax to be 12.8% and tax at 9.6%. Little bit of a if you go extreme right and see on the year end in the numbers compared to the last year to this year if you see our revenues stood at 6442 crore and roughly 2223% growth compared to the last year and our margin if you see profit due to attacks it takes shorter compared to last year 4.2% and patch at 6% compared to three months last year.
So I would say overall the performance in my view was pretty good in this particular quarter and in the year. Over to you.
Nuguri Venu — Managing Director and Chef Executive Officer
Thank you very much Ajay. And if I go to the last slide before I hand over back to the operator for the Q and A as we close the final quarter of fiscal year 2425 and step into the new financial year, our focus remains on carrying the growth momentum into FY2526. The company remains steadfast towards maintaining its leadership in core segments along with establishing and strengthening our presence in industries, cost emerging segments like data center, energy storage, etc. We continue to accentuate our export capabilities and digital province to accelerate our growth further. With our new service BU in India being fully functional from April 1st, 2025, the focus will be on strengthening the segment and segment and exploring, tapping into potential opportunities and offering cross BU offerings to our customers.
We remain committed to adding more vigor to improve our overall operational efficiency and boost productivity and quality, especially under the umbrella of Hitachi. The quest to leverage the largest ever backlog for revenues and margin accretion remains one of our key priorities along with systematic focus for the optimal utilization of the raised capital. Furthermore, our efforts to build our capabilities will continue to meet ever growing energy requirements both domestic and global. Most importantly, there will be no compromise regarding our license to operate, safety Integrity, quality in any of our spheres of work to stand the test of time and meet energy requirements today and in the future, we will continue to reskill, upskill our entire employee workforce.
And we continue to build capacities, not only our factories, our project sites, also for our engineering capabilities, but also our future, future talent required for our group. So with this, I close my presentation and request the operator to open the channel for the questions. Thank you very much.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question comes from the line of Mohit Kumar with ICICI Securities. Please go ahead.
Mohit Kumar
Yeah. Good afternoon, sir and congratulations on a very strong order book and a great. My first question is, is it possible to share the FTVDC order book at the end of F25?
Nuguri Venu
Sorry, what was the question?
Mohit Kumar
Is it possible to share the SX HVDC order book at the end of 535?
Nuguri Venu
Okay, so normally we don’t give you that. You know we don’t. We had only booked the one HVDC project last year in the. In the, in our. In our backlog. So we have booked a one HVDC project, the second HVDC project which we announced that will come in this quarter because we have concluded the contract from the first week of F1.
Mohit Kumar
Understood. My second question is, have you experienced. QIP related expenses in the quarter or will it impact in Q? Will it impact Q1 FY26 everybody.
Nuguri Venu
Poovanna.
Poovanna Ammatanda
Yeah, so this is Poovanna again, thanks for that. So QIP related expenses are estimated separately which will be taken out out of QIP related proceeds. So that will be paid separately. So that will not impact operational.
Mohit Kumar
Not. Come through pn, not pass through P and L. Is that right? Understand?
Poovanna Ammatanda
Yes.
Mohit Kumar
My last question, sir, is the. In the cash flow, there’s a decrease in other financial assets and there is a decrease in loans advances and there is an increase in other liabilities. This increase the other liabilities it created to mobilization advances and what is the reason for decrease in loans and advances?
Nuguri Venu
So increase in other liabilities? Basically it is from the advanced collections that you have got. So that is what. Mostly it is because of advanced collections.
Mohit Kumar
That we are getting decrease in loans and vouchsafes
Nuguri Venu
decrease in loans. Earlier we are adding the short term borrowings, as I told you in the beginning, we are not having any short term volumes right now.
Poovanna Ammatanda
We are a debt free since then, since last quarter.
Nuguri Venu
Yeah, yeah.
Mohit Kumar
Understood sir. Thank you sir. Thank you.
operator
Thank you. Next question comes from the line of Umesh Raut with Nomura India. Please go ahead.
Umesh raut
Yeah. Hi sir. Good morning. So my first question is pertaining to incremental opportunities on HVDC side. As we are hearing, there are three packages which are signed up and especially one is on the BSE based technology which is Cloud of South DUL part. So any update over here, any indicative timeline by when you expect finalization of BS orders and subsequently I also know, I also want to know how your execution would look like from the projects that you have won on the HVDC side in last two quarters.
Nuguri Venu
So on the timeline as we are saying that you know, in our view one one, if not second one would may get finalized by the second half of this fiscal year. So when it comes to the technology wise we have explained also for Hitachi Energy, he invented this HVDC technology 70 years back. Started with the LCC. Thereafter we moved to VSC technology throughout the world. We have close to 150 gigawatt worth of installations both combined LCC and VST technology. So we are agnostic of the technology and just for information, the project which we are almost in the final stage of completion, which is Mumbai, which is a BSE technology.
So whatever the customers want, we have the technology, we have the capabilities and we have also done a lot of localization of those things in that. So we will do that as and when it gets mature. There are two projects which we have one project in our portfolio March and as I said second project has come into already house to the that has come into our books in the first quarter. These projects and normally will be slow beginning.
Umesh raut
So is it fair to assume that initials will have about 1/3 of execution and maybe subsequently. Okay, okay. From a capability point of view, I just wanted to understand how many projects on the HVDC side you can execute simultaneously in a similar time frame.
Nuguri Venu
We have, as I said right now we have a if you ask all HVDC project portfolio. If you look at it at least end of 31st March, we have three projects. We have a Marinerslink project, we are supplying Portly and then we have Mumbai project and then we have other projects. So it is not about how many we can do it. And we are flexible, we are agile and we are gearing up the expansions in anticipation of that. And as and when we see the more things like that we also expand our factories but also our execution capabilities in that.
But having said that, we look at every project as a new project. We look at in a risk reward basis and then we take a decision based on each and every project.
Umesh raut
Sir, I have one basic doubt when you mentioned that certain technology is getting fully absorbed in particular year. So what do you. So when I refer to your annual report there are mentions about various components or technologies getting fully absorbed in terms of technology transfer. So.
Nuguri Venu
Which report you are referring it to?
Umesh raut
When I refer to annual reports of your company, you always mention that certain components or technologies got absorbed during that particular period. So for example, in FY24 annual report you mentioned that BSE based wall technology version G5 got fully absorbed in India. So does this mean that you can manufacture these walls local in India?
Nuguri Venu
Okay, yeah. Any. Any new technology comes. So we always, you know, bring those technology and localize the technology here. So that’s what we meant in that.
Umesh raut
Okay. So based on current capabilities how. How much of indigenized or localized value addition we can do in case of HVDC project execution.
Nuguri Venu
So we have been giving. You know, we will not. We have a huge. Whatever we today it really not HVDC but all of all the portfolio put together. So whatever we are producing globally more than 80% we produce locally here. So that’s what is the thing. There’s a value add is a different and what we produce deeper. For example transformer you take. We don’t have a CR0 here, right? We have to import it. We take the value add locally to come into picture. But we have end to end manufacturing of the transformers. Just give example of that.
operator
Thank you Mr. Raut. Please rejoin the queue for more questions. A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of Bhalchandra Shinde with Motilal Oswal amc. Please go ahead.
Bhalchandra Shinde
Hi sir, there is one concern in most of the investors like if we we are getting so many HVDC orders. But after that relatively order inflow growth may taper out. If you can provide insight that what kind of order inflow growth one should see over next in a longer period of time. Especially when the kind of HVDC capex. Is happening globally and within India.
Nuguri Venu
I think our whole strategy has been, you know, our portfolio be it the product system, services software is the business generation and the consumption. Okay. So HUDS is the one part of our portfolio. So it’s. We have a four Business units, FVTC is one of them. It’s not the only one. So we’re not building the strategy only based on the FTC HVDC for sure it’s coming in a big way. So we have the full fledged transformer portfolio, we have a high voltage portfolio, we have grid automation and then the grid integration which includes the startcoms and hvdc.
Our view been saying very clearly the energy transitions requirements especially on the targets set by the government. It needs a lot of, you know technology has to come in. Technological products systems need to come in. For example you need to have more HVDC projects, more energy storage and more 765gb transmission. And also some 12kv transmission line also is coming. All of them are enabler for us and our portfolio will go into that. That’s the one aspect. And then we come to the edge of the grid expansion, for example data center, energy storage. Here again we have the complete portfolio.
It goes on that. So I’m not saying that just because HBDCs will slaughter after some time and then order flows. We are not seeing that scenario at this point in time and we are looking at short term to medium term basis and we see that market is very robust. The tailwinds are supporting us. The reason we are expanding it, we are expanding our manufacturing capabilities capacities in all the four business units.
Bhalchandra Shinde
Got it, got it. And in the margin trajectory wise like. We showed relatively thinner margins in first. Half and we improved on margins in the second half. Similar kind of a trend one should see in FY26 or overall execution front will be uniform.
Nuguri Venu
I see on an overall basis, quarter on quarter, the mix can differ, things can differ. So we generally we see a slow start in the first quarter of the financial year and which will pick up because many of our customers are also working towards their purchase, et cetera. But what we said last time that we will reach a double digit margin in this quarter. But our thing is that overall year wise we will maintain the double digit.
Bhalchandra Shinde
Good, good. Thanks.
operator
Thank you. Next question comes from the line of Nikhil Vandali with Goldman Sachs. Please go ahead.
Nikhil Vandali
Yeah, hi. Thank you sir. Congratulations on the great set of results. Can I ask the margins profile typically for the HVDC projects versus your base business? It can provide any kind of color or range. That will be pretty helpful.
Nuguri Venu
Thank you Nikhil. But unfortunately we don’t give a margin profile of a project level in that, you know, as I said, HVDC for us is one of our projects only. It’s like any other project. So we don’t do that. All I can tell you that the margin profile of these projects are not margin profile. The risk profile of these projects are better than what we used to see previously. Like for example we used to have a complete turnkey, the civil construction etc. And that. So here our things are mainly engineering and supply of the products and commissioning of the products and ensuring that the system works.
Nikhil Vandali
Understood, thank you for that. And just a follow up question to your capacity or bandwidth constraints for taking more HVDC project. You mentioned that that’s quite dynamic and you can probably operate multiple projects. But what could be bottlenecks or constraints if you were to think as a risk in terms of taking multiple more projects from here on the HVDC line, any thoughts on what could be the potential constraints for you to take let’s say another two or three projects in the next one to two years?
Nuguri Venu
Again, it depends upon how these projects will be stacked up together in a particular timeline. Etc those things will be there. But as I said, we are a global company and our supply chain is global. So depending upon the need we can always see that in our our factory in one particular component manufacturing is full. We can always look at where else we can source it. So those are the flexible options available for us. And with that we will really look at exploring that to take more projects whether it’s hvdc, whether it is supplying of our transformer or many other aspects of that.
Nikhil Vandali
Got it. Thank you very much.
operator
Thank you. Next question comes from the line of Mahesh Bendre with LIC mutual funds. Please go ahead.
Mahesh Bendre
Hi sir, thank you so much for the opportunity. We have order book of 19,000 crores. So when the execution will pick up, I mean when execution will pick, is it in 26 or 27 out of the current order book?
Nuguri Venu
No, our order book is ongoing. Right. Like for example last year based on our order backlog we have improved the revenue of almost 20 to 23 percentage. So the 23% higher has come from the existing order backlog. So we feel that, you know, part of the most of the thing, I would say order, most of the revenue will come from the existing order backlog this year and some of the things will spill over into the next years.
Mahesh Bendre
So my question was out of 19,000 crores, whether the majority of this will get booked in the current year that is FY26 or is it in FY27.
Nuguri Venu
For talking about revenue I think we will see. Let’s slightly address your question independently. Other than the hvdc. The rest of the things, the order to the revenue cycle depending upon the thing anywhere between three to six months to goes up to 18 months. Right. If the large transformer or log GS et cetera. So that’s the thing in there. If you have an order and then you can say that you know from 3 months to 18 months is what you can convert that into revenue. But HVDC I told you it takes a long time and it has 48 months completion period to one part of the part of the project and 54 months is the remaining part of the project.
So that will take a longer time. That will not happen in the same way as I described for the rest of the portfolio. Sure.
Mahesh Bendre
And last question from my end sir. Globally also there is a shortage of transmission distribution equipments. So given the strong demand in domestic market is there any limitations on on us in terms of taking export orders in the near term?
Nuguri Venu
No, we do not have any limitations on that. As I told you our exports last year whole of fiscal year if I remove the HVDC is in the 37% of our and exports have grown year on year from last year. Absolute value. It has grown and the percentage has also. But having said our pipeline in the domestic market is very strong. Our pipeline from the renewable, pipeline from the transmission, pipeline from data centers, pipeline from many other sectors where we are working on that it’s quite strong. And our focus always. I’ve been saying this and I continue to say our focus is to address our philosophic market first and then we go to exports.
Mahesh Bendre
Sure sir. Thank you so much sir.
Nuguri Venu
Thank you.
operator
Thank you. Next question comes from the line of Haji Patel with Equal securities. Please go ahead.
Haji Patel
Thank you very much for the opportunity sir. So my first question is on our capex. You have talked about investing close to 2000 crores over next four to five years. When I see our FY25 capex that number is close to 130 crores. So from here on will we step up our capex to maybe 400, 500 crore per year kind of a level?
Nuguri Venu
Yeah, I think. Go ahead Ajay.
Ajay Singh
Yeah. So thank you for the question. Rightly so in this year we have done our QIP and our. We have already declared that we’ll be spending across 2000 crores in a span of four to five years. That was the case. So what we have done in this year obviously in the next few years it will be let’s say 4x kind of thing. 4x to 5x kind of thing so that is what we see at the moment and our drive will be in that direction only.
Haji Patel
So could you share what kind of product groups or solution groups that we will see? I think one clear area would be investing towards this incremental HVDC related factoring. Apart from that, what kind of investments we would see towards maybe Statcom, the higher range of EIS CIS transformers. Anything that you can share on that front will be very helpful.
Ajay Singh
But this investment we have already spoke about earlier also it is a good widespread. It will be in all our business lines expansion, the business line transformers, high voltage grid automation, so and so forth.
Haji Patel
Understood sir. So my second question is on exports. As you have explained our exports and even the share of exports has grown very sharply in FY25. Are there any more geographies or product groups that have been allocated to us by the parent? Are there any more products where we have become or we will become a global feeder factory for the group. So any outlook if you can share on that front that will be very helpful.
Ajay Singh
So our export strategy as I was explaining to you also you know very well that is a three pronged strategy. You know first one we have some of the products to the global feeder factories and that is the same. We have not added any new products into that. And the second one is we have been allocated certain markets and those things are dynamic as and when we now we getting new markets so we will be doing it. And the third one is we do have a 3D factories and then based on the fitted factories we are supplying our components into that.
So this is how the three prone strategy and there is a scope. As I said, our exports is not at the cost of the domestic market. So if we have more slots we will definitely opportunity for us to grow in exports.
Haji Patel
Sure.
Ajay Singh
Thank you.
operator
Thank you. Mr. Patel, please rejoin the queue for more questions. Next question comes from the line of Renu with IIFL Capital. Please go ahead.
Renu Baid Pugalia
Yeah. Hi, good afternoon. Thank you for the opportunity sir. I have few questions. First just trying to understand that in the last two quarters while we have seen margins coming to double digit digit levels. Even if we add that the effect of commodity gains is still in 13% levels which is significantly lagging other peers who are in terms of their performance mid teens to 20% range. We’re trying to understand what is pulling down the margin mix for Hitachi versus the other peers in the current business environment despite the execution of high margin actually that they’ve been.
That’s the first question.
Nuguri Venu
Yeah. So thank you for your Question, Renu. We have also done our own analysis of that. So I don’t want to make a comparison with the competition. But our margins are coming in line with our strategy and it’s coming out. And we have been saying last two years, it’s not that we take a dip in one year and then start doing that kind of a strategy. Our strategy is a continuously sustainably growing thing. That’s exactly what we said. We said two years back that we reach the double digit and we reach the double digit. And we said on a year, on year basis we sustained this and it will also probably improve it going forward.
Renu Baid Pugalia
Okay. So even if the market is giving opportunity, we may not be very excited to grab better profit yield from it.
Nuguri Venu
We will also at the same time invest in our future. So we have, whenever we are looking at it, we are not looking for a short term gains, we are looking for a long term. So as I said, our focus is a domestic market. We continue to serve our domestic market. And that’s where is our thinking.
Renu Baid Pugalia
Got it. The second is do we have any updates? Probably I might have missed it out, but do we have any updates on the electrical packages related to the bullet train? Are we still expecting something from it or probably we are out of the race for those orders.
Nuguri Venu
No, I think it’s getting delayed. That’s what I understand. It’s getting delayed right at this point in time.
Renu Baid Pugalia
Any particular timeline for fiscal 26 or. Probably it’s difficult to put anything on paper right now.
Nuguri Venu
I think it should happen in this fiscal year. So we are not sure when and how it will happen.
Renu Baid Pugalia
Got it. Our last bookkeeping question on slide 11 of the presentation. The segment mix numbers for the quarter seems to be backdated for fiscal 24 and 23 and not updated for 25. So can we have the updated revenue mix between Utilities, mobility and industry?
Nuguri Venu
Sure, sure. So we will. We’ll send that. The numbers are correct.
Unidentified Speaker
But the numbers are correct.
Nuguri Venu
Okay. The numbers are correct. Here is wrong. Okay.
Renu Baid Pugalia
Okay. That’s not updated. Got it. Thank you and best wishes. Thank you.
operator
Thank you. Next question comes to the line of Ashwini Sharma with Emkay Global Financial Services Ltd. Please go ahead.
Ashwini Sharma
Hi sir. Good afternoon. Thanks for the opportunity. The first question, if you can, you know, give us some idea on current tender pipeline X of hvdc. You know, how is that helping out?
Nuguri Venu
We don’t normally give the value of the pipeline, but our pipeline is quite robust compared to what it was one year ago and one year now. And excluding hbdc, the Pipeline is very robust.
Ashwini Sharma
Okay. And the second question is that as. We, you know, move towards execution of these SVDC orders. Just wanted some idea on the working capital requirement. Is it different from the base orders. Or any inputs in that?
Nuguri Venu
No. Maybe our CFO they will also join. But as you know, these are quite a large HVDC large projects. Right. It needs, you know, we need to be ready to manage the working capital whenever it is required in any particular, you know, part of the project cycle. You know, that’s where you know we are looking at it.
Ajay Singh
Yeah, it is right. Being a big project initially when we start, it will start with a low working company requirement. But once it on depends, maybe in the year two, the working capital requirement will be more for sure. For that already we are all equipped and we are having a plan in place.
Ashwini Sharma
Sure, sir. Thank you. Those were my questions.
operator
Thank you. Next question comes from the line of Bharat Shah with ask Investment Managers Ltd. Please go ahead.
Bharat Shah
Yeah, congratulations on good outcomes. But don’t regard my question is a bit of a spoil sport. I must see. Of course the performance is robust in financial terms. But I would say the size of the order book, strength of the opportunity, all are more in the external segment. It is external opportunity which is propelling us. But when I look at internals of the firm, the innards of the firm. Some of those questions came from the earlier participants about the margins in a business which is demand is robust. We believe that we are technologically in terms of quality of engineering, we have superior solutions.
We also have a large business size. Therefore, in a business where gross margins are still at a very healthy 40% level. Our operating profit margins at just over six and a half percent in the year of 2024 and little over 9% in the fiscal year 25. I am unable to understand why these are so poor. That means our internal costs are too high. Or maybe our methods, processes, re engineering something. But time of se it doesn’t add up.
Nuguri Venu
No. Thank you for your question. Maybe I’ll ask our CFO Ajay to talk.
Ajay Singh
So as you see, if you see our cost structure. Cost structure. If you see you rightly mentioned, our gross margins are hovering around 38 to 40%. But the expenses also if you see, compared to the last year, just compared to the last year, our personal expenses, for example, compared to the last year came 9.6 to 8.5%. The other expenses also are holding the same line. The depreciation finance was to us. It is all consistent. It is only with the kind of product mix and the future revenue growth that we are having where coupled with export and service will be whatever we are committing and whatever we are delivering will be moving in that direction.
Bharat Shah
No, but I would say Mr. Venu this is not a finance question. I would say this is a business question. He answered about depreciation in finance cost. But they sit after the operating margins, not before.
Nuguri Venu
Let me, let me probably I just said that’s why I said that I told you Ajay will add and then I’m also going to top it up. So Mr. Shah, what we are looking at is. I will also tell you consistently we are not looking like. I don’t want to make any comparison here. There are other companies who compare. They’re also making losses in the two, three years. We are a consistent company wanted to build a company in a very long term sustainable growth. Both growth in terms of top line growth in terms of bottom line.
Some of the projects we look forward to we need to start working on those things much ahead of the things which may also probably incur the cost. All those things will be also required in addition to the technology which is very important. One of the reasons why we are here, we are able to compete and beat others and get the orders is because we are doing a lot of localization and bringing the technology and localization. All those things will pair at some point in time. But right now as I said we are in line with our strategy.
We are not moving. We are told two years back we enter double digit margin, we grow higher than the market and we expand our things into geographical things as well as high growth segment. We are on our safety ratio. You see here what we are saying, we are doing it.
operator
Thank you Mr. Shah. Please rejoin the queue for more questions. Next question comes from the line of Amit Agicha with HG Hawa. Please go ahead.
Amit Agicha
Thank you for the opportunity. Am I audible? Sir?
Nuguri Venu
Yes.
Amit Agicha
Sir. What is the growth outlook in data center and how are you positioned versus peers?
Nuguri Venu
Data center is one of our key growth segment and we call it the high growth segment and we are very well positioned. We have a strategic approach on that. We do a lot of long term deals with some of the hyperscales, both global hyperscale, local hyperscales. We have a multi year projects in that. So that’s why you know we are very in one out of the three data centers today is powered through our lead integration solutions in fact. So we are well established, we are establishing, we are driving even more to offer our products and ports for doing that.
Amit Agicha
What is the addressable market size for services in India and how is the new business unit expected to scale in 2627?
Nuguri Venu
This is also we have been telling previously our addressable market. We have a 60,000 crores worth of installed case in India. Since last 25 years we have been doing it right and we saw that our addressable market, our potential order addressable market. This whole 60,000 crores is addressable market but every single document is a market, right? We said we have a potential of future addressable market in the range of 2000 crores per year. Orders are in the ballpark in the plus minus in that range and that’s what we are looking at right now we are on 500, 600 crores of our orders.
So our plan is to take it over a period of time 2000 crores. It will not happen overnight but it will take three to four years. So we are productizationing, we are offering a digital offerings to our customers. Both IT OT combinations also we are looking at as we speak we are doing a lot of pilots with many of our industrial customers, data center customers. Some of the data center customers are looking forward for providing the life cycle things. All those things will come into that. It won’t happen again overnight. It is a three to five year journey.
Amit Agicha
Last question I think how will be using the QIP proceeds of 2,500 crore plus? Like are there any inorganic opportunities inside?
Nuguri Venu
Yeah, I think QIP proceeds we have been talked about very clearly and 2/3 of that you know we use in our expansion CapEx and then the rest 10% is our 35% is for corporate usage. Yeah. 25% is our CapEx usage and 10% is working capital. But having said that we are actively looking at some of the things and not in areas of a transformer etc. But mainly in our value add or complementary things like our new segments. Those are the things.
Amit Agicha
Thank you for the future.
Nuguri Venu
Thank you. So operator, since we already reached our time and I know that there are lots of queue there so please reach out to us. We have a back to back calls with some other things. I really want to thank you for your interest and listening to us. So if you need any further information so please reach out to to us anytime. Happy to engage and provide the answers to you. Thank you very much and looking forward to talking to you soon.
operator
Thank you on behalf of Hitachi Energy India limited that concludes this conference. Thank you for joining us. You may now disconnect your.