GE T&D, the listed entity of GE's grid solutions business in India, has turned multibagger in the last one year, with the stock price surging more than 8-fold, thanks to strong order book and profitability. A year ago, shares of GE T&D were priced at ₹210 each, which surged to an all-time high level of ₹1,723.55 today, delivering an impressive return of 720%.
In the calendar year 2024, GE T&D share has risen 221%, while it climbed nearly 26% in a month, indicating the energy stock's consistent positive performance.
On Thursday, GE T&D shares opened higher at ₹1,723.55, hitting its 5% upper circuit limit against its previous closing price of ₹1,641.50 on the BSE. The largecap stock has been rising for four sessions, gaining as much as 15% during the same period.
The power stock got a boost today after the company, engaged in the power transmission and distribution business, bagged two orders worth 90 million euros (₹810 crore). The company has secured these two international orders from General Electric (GE) entities in France and Middle East for supply and supervision of high voltage products. The development came ahead of the company’s annual general meeting (AGM) scheduled to be held on September 4, 2024.
In an exchange filing post-market hours yesterday, GE T&D said that it received an order worth 26 million euros (₹230 crore) from Grid Solutions Middle East FZE, Dubai. Besides, it was awarded another contract worth 64 million euros (₹580 crore) from Grid Solutions France.
As per the company, both orders are for supply and supervision of high voltage products and are to be executed in 2 years. Adding to it, both orders fall within related party transactions and are being done at arm’s length.
Post these deal announcements, Amit Anwani, Research Analyst at Prabhudas Lilladher, says that healthy order pipeline in the power market, a strong order book of over ₹6,000 crore, and management’s focus on margin improvement augurs well for strong revenue and profit growth for GE T&D India.
The brokerage house, however, has given ‘Reduce’ rating on the stock, saying that it is trading at a price-to-earnings ratio (P/E) of 120x/75x on FY25/26E earnings.
GE T&D ended the financial year 2023-24 on a positive note, posting 14% growth in revenue at ₹3,170 crore against ₹2,770 crore in FY23. The order book grew 112% to ₹5,790 crore as compared to ₹2,740 crore in the previous fiscal.
On the operating front, EBITDA stood at ₹341.5 crore against ₹135.5 crore in FY23, while profit after tax (PAT) was at ₹181.1 crore against loss of 1.5 crore in the previous fiscal. The board of directors of the company also recommended a dividend of ₹2 per equity share for the financial year 2023-24, subject to shareholder’s approval.
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