GE Vernova T&D India shares jump 9% on Rs 13,000 cr order; Nomura ups target price

GE Vernova T&D India Ltd (GET&D) jumped 9 per cent in Tuesday's trade after winning an order with an estimated value of Rs 13,000 crore. Following the development, Nomura suggested a 'Buy' rating on the power transmission equipment maker and raised its target price on the stock to Rs 6,000 from Rs 5,675.

On Tuesday, the stock rose 8.98 per cent in Tuesday's trade to hit a high of Rs 4,755 on BSE over its previous close of Rs 4,363. The GET&D stock opened at Rs 4,614 and was last quoted at Rs 4,752, up 8.92 per cent. The day's low stood at Rs 4,611. The stock has hit a 52-week high of Rs 5,650 and a 52-week low of Rs 2,525.

HVDC order

GE Vernova T&D India has secured a contract from Power Grid Corporation of India Ltd (PGCIL) for the design and establishment of a 6,000 MW, ±800 kV HVDC terminal station to evacuate renewable power from Barmer-II to South Kalamb. Nomura estimates the contract value at Rs 12,980 crore.

The order comes after PGCIL was declared the successful bidder on September 2 for the Barmer-South Kalamb interstate transmission system project under the tariff-based competitive bidding process. The broader project includes 6,000 MW HVDC terminals at Barmer-II and South Kalamb, a roughly 1,000-km HVDC bipole line, 400 kV transmission lines and two synchronous condenser units. Nomura estimates the overall project capital expenditure at around Rs 26,000 crore.

Nomura said, "GVTD's HVDC order win came in as a positive surprise as we were not factoring in a HVDC order win for GVTD in FY27E." The brokerage has consequently raised its FY27 order inflow estimate to Rs 23,100 crore from Rs 12,000 crore earlier.

Revenue estimates raised

Following the order win, Nomura raised its revenue estimates for FY28 and FY29 by 4 per cent and 9 per cent, respectively. The brokerage expects execution of the HVDC order to be back-ended, with revenue contribution beginning from the second half of FY28.

Nomura estimates HVDC revenue of Rs 2,250 crore in FY28 and Rs 4,800 crore in FY29. Its earnings-per-share estimates for FY28 and FY29 are now 5 per cent and 6 per cent higher, respectively.

Ebitda outlook

Nomura has kept its FY27 and FY28 Ebitda margin estimates largely unchanged at 26 per cent and 25 per cent, respectively. However, it cut its FY29 Ebitda margin estimate by 56 basis points to 23.9 per cent, factoring in the likely execution mix.

Despite the margin adjustment, the brokerage expects Ebitda to rise from Rs 2,039 crore in FY27 to Rs 2,832 crore in FY28 and Rs 3,676 crore in FY29.

Target price

Nomura maintained its Buy rating and raised its target price to Rs 6,000 from Rs 5,675, valuing the stock at 65 times its estimated June 2028 earnings per share. Based on the brokerage's September 7 closing price of Rs 4,363, the target implied 37.5 per cent upside.

The brokerage said it remains constructive on GE Vernova T&D India's long-term earnings growth, supported by its strong order book and increased adoption of grid automation technologies.

About GE Vernova T&D India

GE Vernova T&D India is a leading player in India's power transmission and distribution sector, with more than 100 years of presence in the country. Its portfolio includes power transformers, circuit breakers, gas-insulated switchgear, substation automation equipment, HVDC solutions and turnkey substation engineering and construction services.