Hitachi Energy India Limited has disclosed receiving a substantial GST demand notice from Uttar Pradesh tax authorities, marking a significant regulatory development for the power equipment manufacturer. The company received the order on December 10, 2025, at 08:53 PM IST from the Deputy Commissioner State Tax, Sector-20, Lucknow.

GST Demand Details

The tax demand stems from a comprehensive GST audit conducted for the financial year 2021-22 under applicable provisions of multiple tax acts. The financial impact of this regulatory action is substantial for the company.

Alleged Violations

The GST authorities have identified several areas of concern during their audit of the company's tax compliance for FY 2021-22. The Order-in-Original No. ZD091225178112I dated December 10, 2025, outlines specific allegations:

• Short payment of tax on outward supply due to differences between values declared in TDS returns and GST returns
• Input tax credit irregularities involving cancelled dealer invoices
• Blocked input tax credit issues where input tax was allegedly availed and utilized inappropriately

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

Company's Response and Legal Strategy

Hitachi Energy India has taken a firm stance against the tax demand, expressing strong disagreement with the authorities' findings. The company's assessment reveals confidence in its tax compliance practices for the period in question.

Regulatory Compliance and Disclosure

The disclosure was made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, demonstrating the company's commitment to transparent communication with stakeholders. This regulatory filing was necessitated by the receipt of the order from the GST Authority and follows SEBI Master Circular guidelines.

The company has indicated that based on its assessment of facts and prevailing law, it believes the tax demand and penalty levied are not justified. This suggests that Hitachi Energy India maintains confidence in its tax compliance procedures and documentation for the audited period, setting the stage for what could be a prolonged legal process to resolve the matter through the appellate mechanism.

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.