GE Vernova T&D India Limited, a prominent player in the power transmission and distribution sector, has been served with a Goods and Services Tax (GST) penalty order by the Vadodara GST authorities. The penalty pertains to the non-payment of GST on transportation charges over a five-year period.

Penalty Details

The total penalty imposed amounts to INR 89,28,324, which includes both tax and penalty components of INR 44,64,162 each. Additionally, applicable interest will be charged on this amount.

Time Frame and Nature of Non-Compliance

The GST authorities have identified non-payment of GST on transportation charges for the period spanning from April 2018 to March 2023. This extended period of non-compliance has resulted in the substantial penalty now faced by the company.

Company's Response

GE Vernova T&D India has stated its intention to appeal against the penalty order. The company maintains that the financial impact of this penalty will be limited to the extent specified in the order. In its communication, the company has assured stakeholders that there will be no material impact on its financial or operational activities beyond the penalty amount.

Implications for Investors

While the penalty amount of INR 89.28 lakh is significant, the company's statement suggesting limited impact on its overall financial and operational activities may provide some reassurance to investors. However, the outcome of the appeal process and any potential revisions to the penalty amount will be crucial factors to monitor in the coming months.

Investors and stakeholders of GE Vernova T&D India Limited should keep a close watch on further developments regarding this GST penalty issue, particularly the progress and outcome of the company's planned appeal against the order.

GE Vernova T&D India Limited , a key player in the power transmission and distribution sector, has reported robust financial results for the second quarter, along with plans for significant capacity expansion.

Strong Financial Performance

The company delivered impressive quarterly results, with revenue soaring to INR 15.40 billion, marking a substantial 39% year-over-year growth from INR 11.10 billion in the same quarter last year. This growth was driven by strong execution across both domestic and export markets.

GE Vernova T&D India also reported a notable improvement in profitability:

The company's EBITDA margin expanded significantly to 25.80%, representing a 700 basis point improvement over the previous year. This margin expansion was attributed to increased volume, improved pricing, and productivity gains.

Order Book and Cash Position

While new order bookings for the quarter stood at INR 16.10 billion, down from INR 46.80 billion in the previous year's quarter, the company maintains a healthy order backlog of INR 131.10 billion. This robust backlog provides strong visibility for future revenue growth.

The company's financial position remains strong, with cash and cash equivalents increasing to INR 15.20 billion, up from INR 12.20 billion at the end of the previous quarter.

Capacity Expansion Plans

In a significant move, GE Vernova T&D India announced additional capital expenditure of INR 8 billion, focusing on advanced grid technologies. This investment will:

• Expand capacities at Vadodara for transformers and reactors
• Install new lines for bushings and air core reactors at Hosur
• Enhance capacities for AIS and GIS products at Hosur and Padappai

This expansion is aimed at supporting both domestic and export markets, positioning the company to capitalize on the growing demand in the power transmission sector.

Market Outlook

The management expressed optimism about future demand, driven by India's energy transition goals. These include:

• Target of 500 GW of non-fossil fuel capacity
• Significant HVDC opportunities
• 36 GW of planned pumped storage projects
• Growing data center market

Sandeep Zanzaria, CEO and MD, commented, "The outlook for the transmission segment remains highly positive, alongside strong prospects for the generation sector. We expect peak power demand to climb by close to 80% by 2032, necessitating an unprecedented expansion of the grid."

Conclusion

GE Vernova T&D India's strong quarterly performance, coupled with its strategic capacity expansion plans, positions the company well to capitalize on the growing opportunities in the power transmission and distribution sector. The company's focus on advanced technologies and its robust order backlog suggest a positive outlook for sustained growth in the coming years.

Investors and industry observers will be keenly watching how the company leverages its expanded capacities and navigates the evolving energy landscape in India and export markets.