Hitachi Energy India Ltd Q4 FY26 Earnings Call: Record Order Backlog of Rs. 29,553 Cr, Rs. 4,000 Cr Capex to Double Capacity

Hitachi Energy India Ltd held its Q4 FY26 earnings call on May 25, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Revenue Surge & Margin Step-Change

• Q4 FY26 revenue of Rs.2,751 crore— up 46.2% YoY; full FY26 revenue reached Rs.8,147.7 crore, a 27.6% YoY increase.
• Q4 FY26 PAT of Rs.330.5 crore— margin 12.0%, up 80% YoY; full FY26 PAT of Rs.987.8 crore surged 157.3% vs FY25.
• FY26 EBITDA margin of 15.4%— versus 9.3% in FY25; operational EBITDA for the year stood at Rs.1,252 crore.
• FY26 gross margin improved to 40%— up from 38% in FY25; other expenses as a percentage of revenue fell to 16.9% from 20%.
• Q4 FY26 included a notional exchange loss of Rs.31.5 crore— unrealized, booked in the quarter.
• Operating cash flow of Rs.1,746 crore for FY26— strong cash generation supporting the capex program.

Record Backlog & Broad-Based Order Intake

• Record order backlog of Rs.29,553 crore— as of 31 March 2026, up 53.6% YoY, providing multi-quarter revenue visibility.
• Q4 FY26 order intake of Rs.2,422.5 crore— up 10.6% YoY; full FY26 orders at Rs.18,456.5 crore, +1.6% on a high base.
• Domestic non-HVDC order inflow flat at ~Rs.90 billion— in both FY25 and FY26; management cited capacity reallocation to HVDC as a factor, with a strong inquiry pipeline for FY 2026-2027 across renewables, data centers, and transmission.
• Exports contributed 30-32% of FY26 revenue— export order intake exceeded Rs.3,000 crore (adjusted for HVDC), driven by a three-pronged strategy covering allocated markets, global feeder factory products, and component feeder factories.
• Transmission remains the largest order book segment— followed by renewables, industry, service, and exports as of FY26; a large service order for MSETCL (Chapad control and protection) was booked in Q4 FY26.

Rs.4,000 Crore Programme to Double Transformer Capacity

• Board approved an additional Rs.2,000 crore capex— bringing cumulative commitment to ~Rs.4,000 crore for a greenfield large-type transformer facility at Kadi, Vadodara, Gujarat.
• First Rs.2,000 crore capex (announced October 2024) is ongoing— expected to take 3-4 years to complete; the new facility will break ground in June 2026 and begin transformer manufacturing by Q4 CY2028.
• Additional 30-40 GVA of transformer capacity planned— effectively doubling current capacity, comparable to the scale of the existing factory.
• New facility will produce large power transformers, converter transformers (LCC/VSC), and data center transformers— existing HVDC supply commitments with BHEL remain unchanged.
• Management cited multi-year structural demand— driven by electrification across sectors, viewing the capex as a sustained growth story rather than a cyclical spike.

Data Centers, Renewables & HVDC Pipeline

• India currently has <2 GW of data center capacity (as of FY26)— industry projects growth to 13-18 GW over the next five years, a 6-9x expansion; management highlighted that "industry projections for India's data center capacity currently <2 GW, expected to grow to 13-18 GW over the next five years, implying a 6-9x expansion."
• Addressable market for data centers is ~15% of total data center capex— with the addressable market itself expected to grow 6-8x, driven by grid interconnection, transformers, switchgear, and power quality equipment.
• Per a Central Electricity Authority (CEA) report, India targets 80 GW of battery storage over the next 5-6 years— management cited "India targets 80 GW of battery storage over the next 5-6 years" as a key growth opportunity for energy storage products, some of which will be localized from the parent company.
• HVDC revenue of Rs.1,100-1,200 crore in FY26— representing ~15% of total revenue; management expects 3-4 HVDC projects (LCC and VSC mix) to come up for bidding over FY 2026-2027 and FY 2027-2028.
• Capex momentum observed across steel, transmission, renewables, data centers, semiconductors, battery storage, and automobile expansions— management noted the temporary Q4 FY26 slowdown in transmission projects is now behind, with renewed pipeline activity expected in FY 2026-2027.

Margin Protection, Local Content, and Cost Dynamics

• FY26 gross margin of 40%— up 200 bps YoY from 38% in FY25, but contracted sequentially in Q4 FY26 due to product mix.
• Pass-through commodity pricing and price variation clauses protect margins— management noted that elevated trade and transport costs cannot be fully passed through and are being managed via other mitigation initiatives.
• Company is far ahead of government local content requirements— management confirmed the government requires "30% local content over the next 2-3 years, increasing over the next 5-7 years for each project," but the company already exceeds these thresholds, and capacity expansion is driven by market demand, not localization rules.
• Royalty payments to the parent company continue— as new technologies (data center, energy storage) are sourced centrally; local R&D spend is nil, with all R&D managed centrally.
• Safety and sustainability metrics improved— zero fatalities in FY26, 100% renewable energy in operations, 11% water reduction vs 2019 baseline; CRISIL sustainability ESG rating improved to 61, NSE ESG rating reached 62.

Electrification Era & AI-Led Execution Priorities

• Management prioritised sustaining growth momentum and improving operational efficiency for FY 2026-2027— with core segment leadership in utilities, HVDC, industries, and data centers, while actively expanding into energy storage and service.
• AI Nexus program launched— to harness data, analytics, and AI for smarter decision-making and better outcomes; no specific revenue or cost targets disclosed.
• Three-pronged export strategy formalised— direct sales to third-party customers in allocated markets (SAARC, parts of Southeast Asia, Europe), sales through Hitachi Energy global offices, and contract manufacturing for Hitachi Energy feeder factories; transformer delivery lead times for export markets are 12-15 months.
• No specific numeric guidance provided for FY 2026-2027 or FY 2027-2028— management cited the electrification era as a secular growth driver but offered no quantitative revenue, margin, or order intake forecast.
• MD & CEO N. Venu closed the call stating— "the electrification era has arrived and every sector—transport, industry, data centers, energy storage, industrial, and domestic—is being electrified," with Hitachi Energy positioned to support customers through this transition.