GE Vernova T&D India Limited (522275) Earnings Call Transcript & Summary

Ladies and gentlemen good day, and welcome to the GE T&D India Limited First Quarter ended 30th June 2021 for FY 2021-'22 earnings conference call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Suneel Mishra, Head of Investor Relations, GE T&D India Limited. Thank you, and over to you, sir.

Thank you, Rutuja. Ladies and gentlemen, good evening. I wish every one of you are safe. So welcome to today's conference call with the GE T&D India Limited management team here. As informed, this conference call has been organized to present and discuss financial results for the first quarter ended 30th June for the financial year '21-'22. Now let me first introduce my management team available on this call. We have with us Mr. Pitamber Shivnani, who is the Managing Director and Chief Executive Officer; further, we have Mr. Sushil Kumar, who is the CFO; we have with us Mr. Nagesh Tilwani, who is our Products Business leader; we have with us Mr. Sandeep Zanzaria, who is the Commercial leader; we have with us Mr. Mariasundaram Antony, who is our Projects Business leader; we also have with us Mr. Manoj Prasad Singh, who is our Company Secretary. And lastly, we have Mr. Anshul Madaan, who is the Communications leader. So please note that this conference call is scheduled up to 6:00 p.m. I hope you would have received the analyst presentation, and the same has been uploaded on our website. I hope you would have read the disclaimer on Slide #2. I would now request Mr. Pitamber Shivnani to begin this conference call highlighting key events of the quarter. Thereafter, Mr. Maria and Mr. Nagesh updating us on operations and factories. Then Mr. Sandeep Zanzaria will be taking us to the market. Lastly, Mr. Sushil Kumar will give us insight on financials. So I now invite Mr. Shivnani to begin the conference with his opening remarks. So over to Mr. Shivnani.

Thank you, Suneel. Ladies and gentlemen, good evening. Thanks for joining the call. We hope you and your families are healthy and safe. I would like to start this call by giving you a brief overview about the last quarter and then I would request my other colleagues in the call to go through the details. In quarter 1 financial year 2021-'22, we continued to operate with full rigor, however, certain restrictions in few states due to -- continued to pose challenges. Our teams are continuing to deliver tirelessly even during these tough times and for that, I would like to thank our GE colleagues who are working around the clock to serve our customers, our communities and our company. All our plants are fully operational as of today. During the quarter, our teams commissioned important projects associated with Green Energy Corridor Transmission System. This includes commissioning of 765 kV gas insulated GIS at Phagi in Rajasthan as well as 400 kV gas-insulated GIS substation for POWERGRID. The substation will facilitate the evacuation of renewable energy getting generated in solar parks in Bhadla, Fatehgarh and Bikaner at various beneficiaries. And Maria, my colleague will give you the operational update and details later on in the call. Our biggest priority is growth in orders, and we improve our team's abilities to market, sell and service the products we have today. Though Sandeep will take about -- talk about the orders in detail, but let me highlight one of them here, which is related to our continued winning streak in 765 kV power transformer segment. We received order of 6 more 765 kV power transformers from Power Grid Corporation of India under the Transmission System Strengthening Scheme for evacuation of power from solar zones in Rajasthan under Phase 2. This is in addition to our order of 45 units of 765 kV transformers and directors that we received from PGCIL in the last quarter. Q1 has been a disruptive quarter as everyone has put to test by the virus and hence, the same has impacted our financials as well, but we were successfully able to reduce our debt by INR 24.5 crores. Nonetheless, we remain cautious going into the remaining part of the year given the uncertainty associated with pandemic and Sushil will walk us through the finance part shortly. We continue to use lean to improve our operation and our cost structure. I visited Vadodara transformer factory recently and was amazed to see countless Kaizen examples across the company. There is a huge thrust on using lean to improve safety, quality, delivery and cost. We continue to believe the improvements underway are built on stronger fundamentals and thus are sustainable. We are continuing to lead the energy transition, lowering the cost of electricity and modernizing the grid with a focus on new products, platforms and technologies that enable profitable growth and cash generation over time. Today, we have a strong presence across 26 locations in India, which includes 5 world-class manufacturing units, 5 R&D centers, 13 offices and 2 service workshops. We are not only producing in India for India, but we are also producing in India for globe. With such a strong footprint, we are deeply committed to service the growing demands for electricity in India and are equally focused to leverage the global power market through export of made in India grid equipment. We recently released our annual report for financial year 2021, which shares how we are tackling India's biggest power transmission challenges through innovation solutions, advancing grid modernization and leading the energy transition. India is making great strides towards renewable energy generation and have committed to more than double its non-fissile fuel target to 450 gigawatts by 2030. With a persistent focus on decarbonization and wind the clock power, we believe that Indian energy landscape will continue to undergo a significant positive transformation. This increased focus on clean energy is set to bring significant investments in India renewable sector. This will open a steady stream of evacuation opportunities for grid industry, primarily driven by increased green energy capacity expansion of central and state utilities, growth in industrial sector and restructuring of aging assets. All in all, we fortify our competitive position and unlocking further upside potential and profitable growth and cash generation by selectively acquiring profitable business and staying laser-focused on delivering those projects timely and with high quality. With that, I request Maria to provide further insights on operation during the quarter. Over to you, Maria.

Thank you very much, Pitamber. Good evening, ladies and gentlemen. Very excited to present the operations update for the quarter. We continue to really truly live to our purpose of creating the grid for the future. And I would really like to highlight with more than [ 73-plus ] project sites operational today across the region, we have had a chance to really commission some key projects to some extent, which was highlighted by Mr. Pitamber. One was definitely the first for us in terms of PGCIL Phagi in Rajasthan, where this is our first GE-make 765 kV GIS, which was commissioned in the first month of this quarter, which was manufactured from our factory in Chennai. So -- and this is a huge milestone for us and as well as for our customers. And then the other one, which I really would like to highlight was the PGCIL Bhuj in Gujarat, which is part of the Green Energy Corridor, which is really being set up in the Kutch region of Gujarat. And this particular substation will be commissioned in Bhuj as a combination of 765 AIS and 400 kV and 220 kV GIS. Significant milestone for us in terms of playing a role in terms of the transition -- energy transition, in terms of evacuating the Green Energy for the country. And then we also continue to make rapid strides in our neighboring country in Bhutan, where we kind of commissioned our second project there in Dochula, which is part of the Bhutan Power Corporation, where we set up the -- as a part of their modernization of the grid in Bhutan, we actually set up 5 to 66 kV GIS base, 5 base of 66 kV as well as power transformers and other transformers attending to 5 MVA transformers for the overall substation [ feature ]. So apart from this, we have actually made several other commissioning across the different parts of the country, more so on the eastern part of the country in West Bengal as well as in Jharkhand. And then with our utilities like NTPC and Darlipali. And then another important one was the evacuation of the solar power in Bikaner, which was also a big accomplishment milestone for us in this quarter. And we also continue to play a role in terms of extending the existing infrastructure for some of our customers like Sterlite in Tripura as well as [ Nellu ] in PGCL -- for PGCIL. So we are very, very happy and excited that we continue to play a role in terms of creating the evacuation infrastructure for our customers, which connects the point of generation to the consumption. So with that, I actually hand over the mic to Nagesh to really take over the factory uptake.

Thanks, Maria. Good evening all. In continuation to the discussions, today, I will just give you a brief about our factory in Vadodara, which is a world-class facility for the power transformers in India. We have -- this factory has a proud -- this has been inaugurated in 2009 by the Prime Minister of India, who was then Chief Minister for the Gujarat state. We have -- we are the one who has delivered the first HVDC for 800 kV under Make in India initiatives way back in 2015 in March. This factory's capacity is about 30,000 MVA. And we have all ISO certification fully done in terms of 9,000, 14,000, 18,000. All the ISO certification is in place. Extensive supply chain and quite a bit of effort in terms of logistics and localization capabilities, we are delivering the customers globally. We have also done jobs in exports from this plant. The good part here is the testing facility, which is one of the state-of-the-art testing facility where we can test the transformer to 1,200 kV. And this testing facility has also been accredited by the NABL, the National Accreditation Board of Laboratories. Recently, a milestone, what is achieved is in terms of delivering 500 units of 765 kV transformer and reactor. This is the first-in-class in terms of India, manufacturing plant delivering up to 500 numbers of 765 kV reactors. So with that, I hand over to Sandeep for covering the order [ intake ], please.

So welcome, everyone, and thank you, Nagesh. So Q1 FY '21-'22 remains slightly muted in terms of the business opportunities which were there. We secured an order worth about INR 472 crores, which was about 6.5% growth over last year, INR 443 crores. The main orders which were secured, as told by Pitamber, is that 6 numbers, 500 MVA, 765 kV under the Green Energy Corridor. And of course, in the previous slide, Nagesh also said that we are the first company in India to deliver 500 units of 765 kV transformer reactor, and we are ahead -- miles ahead by our biggest competitor. We also won another 220/33 kV AIS substation from Bhutan Power, continuing our success in Bhutan. And from KPCL, Raichur, we won an order for replacement of 400 AND 220 kV equipments. So there's a refurbishment, which we are doing there. Taking further strides into the renewable segment, we took 1 order for 400 kV substations, including transformers from Renew Power at Bikaner and one from Powerica for their wind power plant to 220 kV switchyard in Gujarat, Khambhalia. So there were multiple, if you see, orders which are coming from the acquisition of renewable projects. Then, of course, from Tanzania, we have taken order for -- from [ Auguste ] International for supplying those cities and [ cemeteries ] from our factory at Hosur. And one of the prides for the quarter is that we have won a 3-year O&M contract from Tata Motors for 3 years for both of their plants for Sanand as well as the Pune plant. So this is -- we would be doing the O&M for there -- 3 years. So thank you very much. And now I hand over to Sushil.

Thanks, Sandeep. Good evening, ladies and gentlemen. I hope everyone is safe and healthy. So this quarter, while Sandeep talked about muted market and order intake, so this quarter was also in those singular lines impacted by COVID wave 2 significantly. So the execution was also impacted for us. On Page 9, we have given the split of orders and revenue between export and domestic. So overall, we did about INR 472 crores of orders, of which 36% came from the export market and 64% of the orders were from the domestic market. On the revenue side, we did INR 638 crores of revenue, of which 21% of revenue was done from the execution of export orders and about 79% of revenue was from the domestic orders. End of June, we had about INR 4,300-plus crores of order in hand, of which 63% of the orders come from the private segment, about 20% of the orders come from the state utility and 17% of the order in hand that we have come from the central utility and public sector undertakings. Moving to Page 10 on the financial profit and loss account. So overall, I'll say that the financial performance was in line with the last year. So last year, first quarter was impacted by the lockdown. And similarly, this year, first quarter has been impacted by the health issues and the COVID wave 2. But overall, we were at INR 638 crores of revenue, almost similar to what we achieved in the last year. Our EBITDA of $14 million was slightly better than $3 million EBITDA in the last year. And the loss before tax of INR 25 crores is slightly better than INR 26 crores of loss that we had in the last year. On the cash and debt front, we generated about INR 25 crores of cash from operations in this quarter. And accordingly, were successful to reduce our debt by INR 25 crores. Our net debt end of June 30 stand at around INR 135 crores. So with that, we'll move to the question and answer. Thank you.

[Operator Instructions] The first question is from the line of Renu Baid from IIFL.

I have a few questions. So my first question is, if you look at the execution itself in this quarter, while it is similar to the previous year, most of your other peers who have reported results have actually reported strong double-digit growth on a pretty depressed bid last year. So can you help us understand where did we lag in terms of execution headwinds and bottlenecks while rest of the other peers were able to offset a good portion of these headwinds? And by when do we expect all these headwinds to ease and growth to revert back?

So Renu, if you see our three factories are in Tamil Nadu. And Tamil Nadu was severely affected by COVID actually. So practically, three factories were total lockdown for nine days, actually, they were nonoperational. So that has also impacted our execution and then the opening was also slow. It was not after nine days immediate openings. So this impacted the execution in the last quarter.

Okay. But no other project delays or otherwise that we see across segments?

No, I don't think there are any major project delays or other things across the segment.

Sure. Sir, the second question is on the other expenses side, back on the P&L, [ CECI ], we were hovering at INR 85 crores to INR 90 crores, INR 95 crores kind of other expenses with a much better revenue run rate. And this quarter, other expenses have shot up to INR 105 crores. So can you help us understand in terms of what kind of one-offs were part in the current quarter, were there further provisions or write-offs? So just to understand the steady-state run rate of the overhead?

Okay. So last financial year, we had about INR 370 crores of other expenses, if I correctly remember, and that gives an average of about INR 91 crores, INR 92 crores per quarter. This quarter, the other expenses have gone up a bit. There are few heads where the expenditure have gone up and there are few other areas where we have been able to control. Two, three areas where the expenses have gone up are ones related to the freight expenses related to the export projects. Second is the ForEx loss due to adverse currency movements. Third is the reimbursement of business support charges to grid headquarter. And then we have improvement on various hits like rate and taxes and other many areas like data management charges and so on. So overall, I think this run rate of INR 100 crores, INR 105 crores is generally what is going to continue.

What was the quantum of ForEx capital loss, if you can quantify that?

ForEx loss was about INR 6 crores to INR 7 crores versus a gain in the last quarter.

Got it. Sir, my next question is essentially, if you look at the business, especially from the order inflow and a marketing perspective. So, a, what is our exposure on the nonutility-based market? We have received a small O&M order from Tata Motors. But otherwise, on the industrial sector, what is the kind of current exposure? And on a very broad base, how does that look versus the previous trend? The point is that we see manufacturing CapEx or industry CapEx picking up, do we have a fair share addressable market to increase the wallet share from the customers in this segment?

So Renu, it's Sandeep here. So basically, what's happening is, yes, we are seeing the CapEx which is coming back into industry. But for us to have a meaningful play in the industry, we require large CapEx because mostly, we are operating into 220 kV and 400 kV segment or 765 kV segment. So any industry which is coming up when it has a huge power requirement, something like maybe a 300-megawatt or a 500-megawatt, those kind of power requirements, then they go for such large switchyards. Otherwise, it is like managed within 33 kV or 133 kV substation where our play is not there. Of course, we are seeing some CapEx coming in the metal side, for example, on the steel side, on the aluminum side. So there are plants which we -- larger metal players are discussing. We have seen some very small traction happening, but probably maybe with next one to two quarters, we will see some new tenders coming, which would be then addressable by us.

But nothing much on the data center for us?

So nothing much of the data centers, primarily because data centers are again, I mean, they are like power guzzling kind of applications. But the maximum voltage, which is required is like 220 kV. So we have certain products which we are offering, for example, GIS, et cetera. In that end, in fact, we are doing one or two -- we are supplying to various CTCs as well for the products for the data center. But the overall application in the substation in a data center is not like a very big number.

Correct. Not much a value addition there from the [ important ] spaces?

No. If I -- just to give you a data center would be having a substation, which might be costing about, say, somewhere between about INR 20 crores, INR 25 crores, just a ballpark number.

Got it. And just one last clarification, the repeat order which we have done or the additional order, which you have won from POWERGRID for the Rajistan evacuation reorder projects. Has it come at better pricing in terms of factoring in all the cost inflation or the pricing would be similar to the old orders, which we had won in Feb-March during the fourth quarter of '21?

No, it's better than the -- what we had won in the first quarter -- sorry, in the last quarter of the last year because the metal price increases were factored when we took this order.

[Operator Instructions] The next question is from the line of Bhavin Vithlani from SBI Mutual Funds.

My first question is on the gross margins. From last couple of years, levels of 23%, 25%. This quarter, we did see an improvement of almost 300 bps plus Y-o-Y and 700 sequentially. If you could give more color on this? And what is a sustainable level that we could expect on the gross margins front?

Thanks, Bhavin, for the question. This quarter, we have a higher mix of revenue from the products business in the domestic and the export market because the turnkey project sites were shut down and we had some other -- the COVID-related challenges. So the improvement in mix towards the product has led to this improvement for the quarter. Won't be giving a long -- the guidance on the margin. But on the long term, I think last financial year, we had about 26.5% as the gross margin. And prior to that in the financial year '19-'20, we had a gross margin of around 27.5% or 28%, in that range. So on a long-term basis, that will be the margin subject to the commodity price challenges, et cetera, which management is trying to mitigate. So as we do more execution of turnkey business in the subsequent quarter, the average of gross margin should come to the earlier years.

Sure. That's helpful. The second question, again, is a continuation on the demand front. If you could give us more color in terms of HVDC because we did take an enabling resolution for a related party for bidding into HVDC project. So what are the kind of projects that we are expecting over the next two to three years? What's the kind of size in that? And also, there is a project with a VSC-based technology. So will GE T&D be able to qualify in terms of technology for that platform of technology?

Sandeep here. So I think if you really look in, for example, two, three years' time frame -- as you know, we have been talking about Leh-Ladakh. So what we understand is that, yes, there are certain developments, by which Leh-Ladakh has an opportunity for initial 5 gigawatt might come out in the market next year. And definitely, as you said, that there will be a VSC technology project. And just to update you, GE has delivered projects in Europe with VSC technology. I will not comment anything about the qualification part, but just to give you the confidence that, yes, we have delivered projects with VSC technology. Of course, you know Adani, and we have been discussing this, already entering discussion. And parallelly, if you really look at the report of the standing committee, there is one more project which has been cleared from Rajasthan previously. But because these projects would be like huge amount of CapEx requirements, the time line, it's very difficult for us to predict. But immediately, this looks to be a sustainable pipeline.

In addition, I would like to add that the RPT approval, which was taken in the AGM was the order that we expect to be decided in the market in this year with the private players for the Western region.

Sure. that's helpful. The last question is on the competitive intensity and the pricing. So sometime in middle of last fiscal year, government actually put nontariff barriers on the Chinese. So if you could give us some color on in terms of the pricing and the margins for the products that -- so for the projects that are coming up now, are we actually seeing any improvement in that? And secondly, alongside that, one of your peers did mention that the delivery timeline, especially on the transformer has elongated. So from 6 months now, it has been 18 to 24 months. Any color on that will be very helpful. That's my last question.

So Bhavin, just to give you an update, definitely, I will not say the prices have gone up because even after the Chinese competition has gone -- I can say -- Chinese company is not participating, still there is an overcapacity in the market. But just looking into the material prices, which has gone up, definitely, the prices have gone up in the market because everybody has got affected [ definitely ] in material component. That is one. And just to answer your next question about transformer [ behavery ], yes, definitely looking into the loading situation and market demand. Yes, there are experience -- all the manufacturers are not able to offer shorter delivery projects. But depending upon the capacity, depending upon the requirement, there are certain costs which are being taken individually by companies. So for a large project, definitely, it would be like minimum 18, 24 months. But if suppose somebody requires one or two transformers, then definitely manufacturers are able to adjust those demands as well.

[Operator Instructions] The next question is from the line of Renjith Sivaram from ICIC Securities.

Like a continuation of the previous question, in the last, I think the tender for that [ airlock ] portion of the GE T&D. [indiscernible] of this VSC technology. Is it that VSC qualification we have got prior to that? Or like was there any other reason that we did not qualify for the previous VSC-related [ HPDC debt ] tender?

I'm sorry to interrupt you Mr. Sivaram, but we cannot hear you properly. Your voice is breaking, sir.

Can you hear me now?

Yes. It's quite better.

So my question is pertaining to this VSC technology qualification for -- the last tender which had come out for this in the Kerala portion, I think we were not qualified. So currently, you're saying that we're qualified. So is that -- is it prior to just that we got the qualification just to get some clarity on that?

So basically, the qualification requirement was that you should have done a VSC project, which we have done now. So that's why we are qualified now to participate in VSC. And of course, when we are talking about such type of technology, definitely, we require the kind of confidence also for the commissioning. So that we have now.

Okay. Okay. That's very helpful. And when we look at the export even this quarter, our export was 21% and last year, full year, it was 22% of sale. Do you see this trend continuing? Like last year, we saw 40% growth in export. But on that high base, what -- will this trend of exports being in that 22% to 23% range continue or you see that plateauing or coming down?

So last year, we made improvement in the export. We had done about 22% of the revenue from export in the financial year 2021 compared to 18% of revenue coming from export in financial year '19'-'20. As you see on the order booking chart also, our export share of orders has gone up, at least for the quarter. And even in the last financial year, the exports were higher in terms of orders. So our effort is to compensate the muted domestic market with the export. And if we are able to win successfully, the revenue share should follow accordingly and the export revenue should increase for the coming quarters.

What's our share of export in our order book?

It's given on the Page 9.

You have given exports [ for other uses ]?

Okay. You're talking about order book. I don't have that number readily available. So we'll have to probably revert back to you separately.

Okay. And what's the current receivable days?

Just a moment. Give me some time. Maybe I'll come back to you in a few minutes on this specific receivable discussion.

And again, we were very much gung-ho on this Green Energy Corridor a couple of quarters before. So what has actually transferred in terms of this Green Energy Corridor opportunity? What's the kind of enthusiasm you are seeing in terms of inquiry levels, if you can throw some color on that?

So Renjith, I think Sandeep here, if you really look at Green Energy Corridor, the government came out with a few large packages in 2019 -- '19 about third quarter. And -- but since then, there have been about four or five packages, which got materialized last quarter -- last quarter of last financial year. But now we see a lot of traction happening. There are about five to seven packages, which for developers are now doing sometime between August and September. So I think not exactly -- so they begin in September, they would not be coming out in the market and placing orders in September. But I think in the next quarter would be a big market due to this Green Energy Corridor, which will be coming on the transmission side.

Renjith, on the receive -- working capital, I'll first talk about working capital. So our working capital is around INR 400 crores end of June, and this has improved versus March. At present, the working capital of INR 400 crores is roughly about 42 to 43 days of sales. And within this, the trade receivable is around 75 days. And in this trade receivable calculation, I'm not including the retentions, which are not contractually due. In addition, I would also like to highlight that last financial year, we generated a cash flow of INR 270 crores. And in this quarter, we have generated about INR 25 crores of cash flow. So overall, INR 300 crores of cash flow generation in the last 15 months, most of this has come from the improvement in working capital and especially the focus on the trade receivable and the reduction in the receivable days.

Okay. And sir, we are hearing regarding the distribution reforms on the [ anvil. ] So is there any chance that we will have some products or we are completely out? We don't have any participation in that range of voltages?

In distribution often we don't have a very large range of products, Renjith. But definitely, we are present because of our automation system. So once there will be an upgrade into the distribution system, more smarter systems would be put in place. So their automation is going to play an important role. And apart from that, there will be DMS packages, which will become -- for hundreds of towns, which will be there to make the distribution system again smarter in terms of controls, et cetera, and monitoring. So the company also has a strong portfolio in terms of DMS systems as well.

So It's largely the automation part where we will have a larger role because most of the low and medium voltage products has gone to a site during the [ packages ].

Yes, you are right. Because most of the distribution utilities are at [ till 33 ] kV. And in this split, what happened, the products with the GE 66 kV and above. Of course, there are certain, for example, Gujarat or Chandigarh. And there are few distribution companies, which still do up till like 66 kV or 133 kV, but that's very miniscule in nature.

Okay. So the automation market is a lucrative area for us for tenders distribution reforms actually kick in on the grounds?

Definitely.

Okay. And is there any other opportunity in the next 6 to 10 months apart from this GDP and this distribution. Is there anything that you're looking at which looks exciting? From the state front also, do you see any of the state governments being relatively more active?

So I would say that there are a few state governments, which are active. For example, there are a few tenders, which are coming from Telangana, there are few tenders, which are planned for Orissa, et cetera, but maybe something is planned from Bihar. But in a sustainable pipe -- a sustainable set of projects has still not picked up the pace what we had in particularly 2019 -- '19-'20.

The next question is from the line of Renu Baid from IIFL. As there is no response from the line, we now move to the next question, which is from the line of Jonas Bhutta from PhillipCapital.

Just following up from Renjith's question on states. So more from a longer-term perspective, sir, the previous cycle, we saw that as PGCIL was building the national grid, the respective states also sort of upgraded their network from up to 220 or 400 kV. So other than these sort of pocketed states, which are throwing up tenders here and there, is there like a program over the next 5 years that will drive the next leg of ordering in states? Or do you think that, that is largely behind us and sort of -- it will be more patchy in that sense in terms of opportunities coming out of state. But in the last cycle states, if not equal to PGCIL, but almost 50%, 60% of their power grid was in terms of ordering, which in the last two, three years, we've not seen that level of ordering in states as well. So I would appreciate your comments on that.

So our assessment is that definitely state should come up because whatever renewable power is getting generated at the end, when it gets transmitted from the network, which is built by TBCB players or the central utility, eventually goes to state. And state has to build the transmission network so that this power reaches to wherever it's designed for. So there has to be an investment, which should come from states. So we are just waiting for the renewable sector capacity addition to pick up so that even the state transmission network should also start coming out with a more sustainable pipeline.

Understood. So my second question was on one of the large HVDC projects that you had highlighted in the fourth quarter call, which was Rajasthan, UP. Given the size and the configuration and given that it typically takes almost three years plus kind of to build out projects like this. So do you believe that given that there is a transmission waiver, the transmission charge waiver on renewable projects, which sort of now expire at somewhere in early 2025? Do you believe that that expiry of such a waiver could sort of derail the project because one of the key triggers for this pickup in TBCB projects for GE was that there's very little transmission charges attached? So do you think that this one large project, which was almost INR 20,000 crores kind of a size could get derailed because the project will not come up in time, even if it was awarded by end of FY '22, in time to make up for that deadline? So out of the 3-odd HVDC projects, do you think that one will fall off?

So I am not very sure on that because the government keeps on -- so if you really look at that when last time, the waiver expired, the government has extended the time line. So I think that's probably more for the developer who would be investing into that project to take a call. I think it's very difficult for an EPC player or a manufacturer to comment on the viability of the project because of this government policy.

Got it. And my final question was, sir, at the end of Q1, we are sitting on an order book, which is almost 24%, 25% lower on a Y-o-Y basis. And I remember that -- you are targeting to do the same kind of top line this year as you did in FY '21. Given how Q1 has panned out, do you still believe that you can get there? Given that you'll be running out of order book or growth avenues beyond -- if the orders actually don't pick up now?

So I think we will be able to do that level, even though we don't give a forward-looking statement, but we expect the growth in orders in times to come because the COVID wave 2 is over and there are a lot of TBCB packages, which are coming up for finalization in next few months. So -- and we have a backlog of INR 43.6 billion. So we will be able to cater to the balance part of this year well.

But just to add on, I think if the orders do not pick up soon, there could be an impact as well. And also there is an uncertainty of COVID wave 3. So those are some of the elements, which may impact the revenue execution for the year.

Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to Mr. Suneel Mishra for closing comments.

Thank you, Rutuja. And thank you, everyone, for your participation. In case if you have any other questions, then please feel free to contact me or Mr. Anshul Madaan on our e-mail ID. So with this, we conclude today's conference call. Thank you again.

Thank you. On behalf of GE T&D India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.