Hitachi Energy India Limited has disclosed receiving another GST demand notice, this time from Karnataka tax authorities, adding to its regulatory challenges. The company received Order-in-Original No. ZD2912252199063 dated December 29, 2025, at 05:12 PM IST from the Deputy Commissioner of Commercial Taxes, (Large Taxpayers Unit)-III, Bengaluru.

Latest GST Demand from Karnataka

The new tax demand stems from a GST audit conducted for the financial year 2021-22 under provisions of multiple tax acts. This represents a separate regulatory action from the earlier Uttar Pradesh demand notice.

Alleged Violations in Karnataka Order

The Karnataka GST authorities have identified different areas of concern compared to the earlier Uttar Pradesh notice. The specific allegations include:

• Non-payment of GST on E-way bill transactions
• Wrong payment of GST on supplies to Solar project
• Non-Payment of GST on Non-GST supplies (Import of Services)

These violations fall under the Central Goods and Services Tax Act, 2017, the Integrated Goods & Services Tax Act, 2017, and the Karnataka Goods & Services Tax Act, 2017, along with rules made thereunder.

Previous Uttar Pradesh GST Demand

This Karnataka notice follows an earlier GST demand from Uttar Pradesh authorities received on December 10, 2025, which involved different allegations and a higher quantum.

The UP demand related to short payment of tax on outward supply, input tax credit irregularities, and blocked input tax credit issues.

Company's Response Strategy

Hitachi Energy India has maintained a consistent stance against both tax demands, expressing disagreement with the authorities' findings across both states.

Regulatory Compliance

Both disclosures were made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, following SEBI Master Circular guidelines. The company's proactive disclosure approach demonstrates commitment to transparent stakeholder communication while it prepares to challenge both demands through the appellate process.

Hitachi Energy (ISIN: INE07Y701011) has reported a mixed set of financial results for the second quarter. The company saw an increase in revenue but experienced a decline in net profit compared to the same period last year.

Financial Performance

Hitachi Energy's revenue for the quarter increased to ₹2.80 billion, up from ₹2.20 billion in the same quarter of the previous year, representing a growth of 27.3%. This growth in revenue indicates a strong demand for the company's products and services.

However, the company's net profit saw a significant decline, dropping to ₹304.00 million from ₹660.00 million in the corresponding quarter last year. This represents a 53.9% decrease in net profit year-over-year.

Improved Operational Efficiency

Despite the drop in net profit, Hitachi Energy demonstrated improved operational efficiency. The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was ₹2.80 billion. The EBITDA margin expanded significantly from 4.69% to 9.98%, showing a substantial improvement in the company's operational performance.

Exceptional Item Impact

It's important to note that the previous year's results included an exceptional item of ₹5.80 billion. This exceptional item likely contributed to the higher net profit in the previous year, making the year-over-year comparison less straightforward.

Looking Ahead

While Hitachi Energy has shown strong revenue growth and improved operational efficiency, the decline in net profit may raise concerns among investors. The company will need to focus on maintaining its revenue growth while managing costs to improve its bottom line in the coming quarters.

Investors and analysts will be watching closely to see how Hitachi Energy addresses the challenges of maintaining profitability while continuing to grow its revenue in the competitive power sector.

The company has not provided specific guidance for the upcoming quarters in the available information. However, the improved EBITDA margin suggests that Hitachi Energy is working on enhancing its operational efficiency, which could potentially lead to better profitability in the future if sustained.