Brokerage firm Nomura has reiterated its 'Buy' rating on GE Vernova T&D India, setting a target price of Rs 5,675. While the company reported 38% revenue growth in Q1 FY27, investors are closely monitoring the impact of a 30% decline in new order inflows. The stock's future performance is linked to a healthy order backlog and potential upcoming High Voltage Direct Current (HVDC) project wins.
Nomura has maintained a positive stance on GE Vernova T&D India, reiterating a 'Buy' rating and a target price of Rs 5,675. This outlook comes as the company navigates a mixed operational environment, characterized by strong financial growth alongside a temporary slowdown in new contract acquisitions.
Revenue Growth and Order Book Health
In the first quarter of the 2027 fiscal year, the company demonstrated solid operational performance. Revenue increased by 38% compared to the same period last year, reaching Rs 18.4 billion, while net profit grew by 25%. This performance was supported by a substantial order backlog, which stood at approximately Rs 209 billion as of June 30, 2026. This backlog acts as a buffer, providing revenue visibility for the coming quarters even as the company works through current projects.
However, the company’s new order inflows faced a 30% year-on-year contraction in the first quarter, totaling Rs 11.4 billion. This decline is largely attributed to a slower pace of tendering in the domestic market. Investors are paying close attention to whether this slowdown is a short-term trend or a sign of shifting demand patterns in the power transmission sector.
Strategic Upside from HVDC Projects
The brokerage’s positive view is underpinned by the potential for future gains from High Voltage Direct Current (HVDC) projects. Notably, current earnings estimates do not fully factor in potential wins from this segment. If the company secures these complex and high-value projects, it could provide a significant boost to its long-term growth trajectory. Management remains confident in its ability to secure Rs 70-80 billion in domestic base orders for FY27, signaling expectations that the tender pipeline will normalize as the year progresses.
Operational Margins and Potential Risks
GE Vernova T&D India has maintained its EBITDA margin guidance in the mid-20s for the current fiscal year, having achieved an EBITDA margin of 25.1% in the first quarter. While these margins remain healthy, they face pressure from persistent commodity costs. Future profitability will depend on the company’s ability to manage these input costs without impacting its competitive pricing.
Beyond cost management, investors may also track the competitive environment. The power transmission sector is seeing increased interest, and the entry of new players or changes in bidding norms for large projects can influence market share. As the company continues to execute its existing order book, the key monitorables for shareholders will be the speed at which the domestic tender pipeline recovers, the awarding of anticipated HVDC contracts, and the ability to maintain current profit margins amidst ongoing cost pressures.