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

Ladies and gentlemen, good day, and welcome to GE T&D India Limited Q4 FY '23 Earnings Conference Call. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Ms. Tanvi Gupta from GE T&D. Thank you, and over to you.

Thanks, [indiscernible]. Good afternoon, everyone. We welcome you to the GE T&D India Limited Earnings Call for the Fourth Quarter and Financial Year ended 31st March, 2023. I'm Tanvi Gupta from GE T&D India, Investor Relationship team. We're delighted to have you all on this call. During the call, we will discuss the company's financial performance, including operational highlights. We'll share the key updates and address the questions you may have. Before we begin, I would like to highlight the important note for today's call. Firstly, as you are aware, we have recently declared the results for the fourth quarter of the financial year ended 31st March, 2023. The said results are available on our website. Further, we have also prepared an analyst presentation for the quarter, which would be under discussion during this call. The said presentation has been mailed to you. Also, I would like to take a moment to remind everyone that today's discussion may contain few forward-looking statements, which are subject to risks and uncertainties. These statements are based on our current expectations, and actual results may differ materially from those expressed or implied. We encourage you to refer to our public filings and disclosures for a comprehensive understanding of the factors that could impact the future performance. With this, now let me introduce the GE T&D India management team available on this call. Firstly, with the most pleasure, I would like to welcome Mr. Sandeep Zanzaria, as the new Managing Director and CEO of GE T&D India Limited in today's call. Sandeep brings with him over 3 decades experience in the power system. He joined GE in 2017 as the regional commercial leader for GE Grid Solutions, South Asia, where he was responsible for commercial strategy and order intake for the region. Prior to joining GE, he had various role in commissioning, project management, engineering as well as commercial and business leadership at BHEL, Areva T&D, Alstom T&D and Schneider Electric. His exceptional leadership and expertise will undoubtedly steer the company towards continued growth and success. Beside Sandeep, we have also been joined by Mr. Sushil Kumar, CFO of the company; Mr. Abhishek Srivastava, Head Business Operations; Mr. Anshul Madaan, Communications Leader; Ms. Anupriya Garg, Company Secretary of GE T&D India Limited. We'll have a dedicated question and answer round towards the end of the presentation, where you can ask your questions and seek clarification on any topic of interest. Thank you once again for joining us today. Now I'll hand over the call to Sandeep for his opening remarks. Over to you, Sandeep.

Thanks, Tanvi. And thanks to everyone for joining us today. We hope you and your families are healthy and safe. We are currently witnessing a positive trend in India with grid electrification market, supported by the government of India's emphasis on expanding electricity access and promoting renewable energy. This commitment has coupled the country's electrification efforts driving significant advancements in the sector. Rising emphasis on clean energy and a collective determination to achieve renewable energy targets set by the Government of India are fueling investments in technological advancements. Furthermore, a growing focus can be seen on integration of smart grid technologies, digital systems, grid analytics and advanced monitoring capabilities, which will ultimately improve grid infrastructure management, enhancing reliability, efficiency and overall quality of power. Our company's expertise in innovative technologies and services align perfectly with the evolving needs of the India grid electrification sector. As a result, we have been receiving orders from prominent transmission players in both the public and private sector. This is evident from our order growth, which has increased by 58% year-on-year in the fourth quarter of financial year '22, '23 and overall by 26% annually compared to the previous fiscal year. In terms of financial performance, we have achieved improvement in operating profit, both in the fourth quarter and in the fiscal year. This improvement reflects our unwavering commitment to delivering values to our customers and shareholders. By operating leaner and more efficient businesses, we are continuously driving cost optimization and improvement in execution. Furthermore, we are pleased to report a [ significant ] reduction of our debt during the fourth quarter of FY '22, '23, strengthening our financial position and increasing stability. Our CFO, Sushil will provide a detailed analysis on these financial numbers later in the call. On the operational front, in the last financial year, we have commissioned a number of AIS, the air insulated and the gas insulated substation, along with supplying critical equipments like the 765 kV transformers, reactors for various substation projects for public and private utilities. These initiatives contribute significantly to the reinforcement of Indian transmission infrastructure and meet the growing energy demands. Moreover, we have taken the lead in deploying automation technologies, not only for India, but also for neighboring countries. Our state-of-art automation and digital grid solutions have been widely adopted by utilities enhancing substations and control centers across the region. Notably, we have secured a significant contract for upgrade and automation of 39 substations in Nepal, including the establishment of 6 master control centers and the replacement of existing control and relay equipments. This project showcases our expertise and dedication to improve the grid efficiency and reliability. Additionally, I'm proud to highlight our recent participation in ELECRAMA hosted by IEEMA, where we had the opportunity to showcase our latest technologies in grid automation, sustainable grid solutions, high-voltage equipment and digital substations. The positive response and feedback received from the industry experts and stakeholders further validate our position in the industry. In conclusion, I would like to express our gratitude for your continued support and confidence in our company. This achievement we have witnessed during financial year '22, '23 demonstrates our dedication and strategic focus, and we maintain unwavering determination to enhance our performance in the upcoming year. Thank you. And now I hand over to Abhishek for sharing the operational performance.

So thanks, Sandeep. I will just take you all through some of the key operational highlights or commissions that we have done in the past quarter. So our pursuit for serving our customers with uninterrupted supplies and making and strengthening the network is stronger. We delivered a few very critical substations for our customers. So one of them was a 66 kV gas-insulated substation for the city of Delhi Tata Power Delhi Distribution Limited. So this was one of the critical supplies. And based on the expectation of the customer, we were able to commission it almost ahead of schedule on 31st of March as per the expectation. Equally focused approach even in the neighboring country. So in Bhutan, we were able to -- based on the time line -- [ registered ] time lines, commission 220kV gas-insulated subset, which is their first and has a very crucial role in terms of improving the stability of power for the Bhutan capital. Similarly, again, one of critical substations for Delhi Transco, which was a 66 kV gas substation at Gopalpur was commissioned on 31st of March. And then adding to the capacity installed base in terms of commissioning of transformers and reactors. So we served and help our customers like Sterlite, Bhutan, Adani and JP, wherein almost close to 1,200 MV capacity was added. In addition to that, we had delivered the SCADA system for Odisha utility, which is a Tata Power South Distribution Limited, wherein our project is helping them monitor close to 100 distribution substation. And similarly, additionally, we are working for the other 2 utilities, which is for the Central Odisha and Western Odisha. So I hand over to Sushil to take us forward through the financials.

Thanks, Abhishek, and good afternoon, everyone. In terms of financial performance, first talking about our orders performance. In the quarter 4 of the financial year, we achieved [ INR ] 8,706 million of orders, which is 58% higher than the fourth quarter order booking in the last financial year. Overall, for the entire financial year '22, '23, we booked orders of INR 27,359 million, representing a 26% growth over the order booking in the last financial year. Key orders that were booked during the quarter 4 of the financial year, mainly included upgradation and automation of 39 substations in Nepal located across 6 different locations by Nepal Electricity Authority. Order from a large private transmission company for supply of 765 kV, 110 MVAR reactor for substation in Narendra and Pune. And order from Power Grid Corporation of India for supply of 765 kV reactors for their project in Narela. Centralized Remote Protection Substation Automation System orders from various private transmission like KEC, Techno and Kalaptru. And 220 kV order gas insulated substation from [indiscernible] Electrical and [indiscernible] India. Moving to the next page on our P&L performance. During the quarter 4, we achieved a revenue of INR 7,031 million, representing a 6.2% growth versus the quarter 4 in the last financial year. However, there was a significant improvement in terms of operational execution and our EBITDA improved from a loss of INR 1,356 million in the last year to INR 316 million of positive EBITDA in the current financial year quarter 4. And this EBITDA represented about 4.5% of revenue. There was a corresponding improvement in the profit before tax and exceptional item as well. Overall, for the entire financial year, the revenue were at INR 27,732 million, which represented a 9.5% reduction versus the last -- earlier financial year. However, again, a significant improvement in terms of EBITDA performance, where we achieved about 4.9% EBITDA for the entire financial year at around INR 1,355 million. Moving to the next page where we give details of the breakup of orders, revenue and backlog. So during the entire financial year, our order booking, as I mentioned, was INR 27,359 million. Of this 35% of orders were from the export market, and 65% orders were from the domestic market. Out of the total revenue of INR 27,732 million, about 30% of the revenue came from the export market, and 70% revenue from the domestic market. End of the financial year, we had backlog of around INR 37,000 million, of which 70% were from the private customers, 14% from state utilities and 16%. [Technical Difficulty]

Sir, can you hear us? Ladies and gentlemen, please stay connected. Ladies and gentlemen, thank you for your patience. We have the line for the management reconnected. Sir, you may go ahead.

Yes. So sorry for the technical disruption. We got disconnected. I talked about the last page on the investor presentation where we have given the details of order revenue state by export and domestic market and are enhanced split between the different category of customers. Now we'll open up for questions.

[Operator Instructions]. The first question is from the line of Parikshit Kandpal from HDFC Securities.

Sandeep, congratulations on your elevation as CEO and MD. So my first question is on assuming this leadership role, so what would be your top 2, 3 priorities, given the background that we had a very strong order inflows and order backlog for the period FY '17, '19. And after that, everything has been on a downhill. We have revived our profitability, and there's also been a pickup in ordering. So I just want to have a sense over the next couple of years, 2, 3 years, given the strong demand in changing energy theme and renewables, so what will be your top 2, 3 priorities in terms of growth and profitability?

Thanks, Parikshit. And so the top 2, 3 priorities will be, again, whatever we have achieved in last 1 year, in terms of improvement in margin and also a reduction of net debt. So one thing would be continuing this effort and improving this to come to a level which is more sustainable and also, I would put it in a way that it is more like -- not like a [indiscernible], but we have more consistent results, that will be one thing. Second would be the growth in the orders. Yes, we need to continue that momentum as well, including, as you said, that we have good opportunities which are there because of the renewable and the government's target of achieving the net zero. So apart from that, I think there are also [indiscernible] opportunity of digitization, which is also going to be playing a key role and introducing not a lot of the few technologies, which are available globally, but also at least initially to start with position ourselves -- to position ourselves in the market as a technology differentiator and then build upon that. So I would put this apart from the key 2 things: one, would be maintaining the EHS, which is one of the most important things for us; and then second, also to keep on working for the talent upgradation and also for the upskilling of the people because the technology is changing, we also need to keep on changing much faster as the market expectation is also growing faster and faster.

Okay. My second question is on this scale of revenues currently at [ 700x ], we have been averaging last 3 quarters at 700. So this is kind of a breakeven, if I look at the TVT level, does the profitability has to be improved and the gross margin is at around 30%. So we need to ramp up this to almost INR 1,000 crores to really have some meaningful profit. So given that our order book has been gradually ramping up and it's at about INR 870 crores of inflow this quarter, so when do you think this journey, this gap of growing from here on can we reach that number of INR 1,000 crores kind of a quarterly inflow or revenues?

Thanks, Parikshit. This is Sushil. As you rightly mentioned, the order booking in the last couple of quarters has picked up. We are on an average in the last 6 months close to an average of INR 8,000 million of order bookings. And our endeavor is to grow it further. And also, you would notice that one of our endeavor is to -- as you earlier highlighted was to be selective and in more profitable orders as well to grow volume from the export segment. As this momentum continues, we also intend to increase the order booking further continuing the themes of better profitability and mix that I talked about. Reaching a revenue of INR 1,000 crores, candidly, will be a bit -- kind of take time because we don't [indiscernible] want to achieve a revenue, which does not actually result into a profitability in the P&L. But endeavor is to definitely keep growing from here on.

Okay. And just Sushil, one more thing on this. Typically like in this business, so we cater -- like the segmentation which we gave, so if you can give some more clarity, like are we present in segments like railways, industrials and -- so utilities is a large segment, but within that, like railways and transport, industrial segments? In terms of product portfolio, so what kind of opportunity do we have at play at railways like Vande Bharat the kind of opportunities in the transportation segment. So do we have the product line like traction transformers there? Or so how do we play that segment?

So operation, we are not -- Sandeep here, we are not present in to that segment. [indiscernible] the transportation segment, but we are definitely present into the industrial segment. For example, a few of the others what we have taken are from refineries also from data center. So in the industrial segment, we are present but not in the transportation.

And sir, lastly, on this entire -- the challenge this -- could we give support to some of the players like KEC, Kalaptru when they bid for utilities like power grid and all? So what could be -- they have received very strong orders this year in domestic T&D space. But I don't think that is getting still reflected in our numbers. So we may have given some bit -- is there outlet already announced order book, is there any significant large L1, which is sitting out and yet to be concluded?

No, no. Presently, we are not having any large L1 positions where the others are yet to be concluded on us.

And just on the [indiscernible], there were some players who were doing the feasibility study. So are we going to bid for that HVDC line? Are we doing some studies there? How do we intend to tackle that and participate in that program?

So we have basically about, in the next 2 to 3 years, we have, as per the Government of India, we have approximately 4 projects which are going to come up. So [indiscernible], which is NCC, which is exactly similar to what Champa Kurukshetra. Then [indiscernible], this is a VSC project. And then we have [indiscernible] and [indiscernible]. So I think we are closely monitoring the situation because all the products will be getting executed practically in the similar time lines. So we would be targeting on specific opportunities. And then we would be bidding and then winning those opportunities rather than spreading ourselves thin on everything.

Next question is from the line of Subhadip Mitra from Nuvama Wealth.

So my first question is -- on the back of the previous question on the HVDC market side. What we understand from recent communication that came from Power Grid as well as that one of those lines is actually being rethought. I think the Khavda line is actually being rethought and may fall out of the HVDC basket. Do you see that in any manner hitting the overall addressable market for you? Because it still remain high voltage, but just not on the DC side.

In the last transmission committee unit, what I've seen is with the Khavda [indiscernible] project has been cleared by the transmission committee. And of course, we are also discussing on that project with CA and all. So at least I'm expecting that not to drop off because eventually when Khavda becomes 30 gigawatt project, the transmission of power will be very critical so [indiscernible].

Understood. Understood. And if I have to look at the [indiscernible] client, what we understand is there are some projects that is going on over there, but maybe GE T&D is not part of it. Are there any product gaps because of which we are not part of the [indiscernible] site study or something like that stuff?

So that's a business strategy. I think we focus -- as Sushil said that the part of the selectivity. So there are certain projects which we target, certain projects which -- because of -- we do a risk analysis and then we decide whether to participate or not to participate. I think probably we would have seen that globally these grid solutions are run at [ USD ] 10 billion project -- number of projects totaling to about [ 10 billion ] in Europe. So VSC is not a challenge for us, but then we look at the overall risk perception of the project and then take a decision.

Understood. Understood. Secondly, with regard to the high-voltage TAM out there. So while the HVDC part of the TAM is quite visible, ex of HVDC, how would you look at the addressable market, let's say, over the next 2 to 3 years? And let's say, what could be your target market share there?

So I would say that, of course, definitely, you know the target market remains the -- TBCB remains the large part of the market. And yes, definitely, the -- in certain places, it would be a product target, in certain places, it will be a project target. So depending upon the channel to the market, that's where we take the decision. Eventually in TBCB, who wins the bid and then we decide whether to go on a project route or on a product route, along with the collaboration of the EPC player. So that is basically a constantly moving strategy, which keeps on changing depending upon the winner of a TBCB bid.

Understood. I mean what I was trying to shoot for is I think we are all aware that of the overall INR 2,40,000 crore kind of CapEx number in transmission which [ CA ] talks about. Just trying to get a sense of within that INR 2,40,000 crores, if one has to look at the addressable market for you, how would you look at that market panning out, let's say, on an annual basis and any estimated market share on that?

Out of that, INR 40,000 crores, probably, what I would look at that market relevant to us would be less than INR 20,000 crores. I think it would be in the range of close to about INR 15,000 crores because when CA talks about INR 40,000 crores, that will include transmission lines and other aspects of the project as well. So for us, the addressable market out of that INR 40,000 crore will be slightly lesser than INR 15,000 crores.

So this is overall INR 15,000 crores spread over a period of maybe 4, 5 years, if I understand that correctly?

No, no, no. What basically I'm saying, out of the INR 40,000 crores what you were saying, but close to about our assessment, what we do for the total market addressable for -- of course, it's close to about $3 billion, which is close to INR 24,000 crores -- INR 25,000 crores annually.

Understood. So INR 25,000 crores annually is the number that we are looking at?

Yes.

Next question is from the line of Mohit Kumar from ICI Securities.

And congratulations on the appointment as CEO. My question is -- the first question is, do we have the capability to take up more than one HVDC project at a time? And how much localization we have done in this country for HVDC?

So Mohit, thanks for your compliment and so this will also depend upon that what is the time frame, which the HVDC project execution has been demanded for. I'm just giving an example that is suppose there are 2 projects which have to run like a 36 or a 40-month schedule, maybe 2 projects might not be possible. But if the time lines are extended and then there might be a possibility to do that. If I really look at the localization part, GE T&D was the first one in the country to have supplied 800 kV HVDC transformer. So the complete transformers are manufactured at our Vadodara plant. Also, if you really look at other aspects of it, there are certain components, of course, which are like those, for example, it might be a [ evolved ] cooling systems, and to some extent, certain technologies of [indiscernible], et cetera, which comes from outside. But otherwise, if a ballpark number, if I have to put in, it would be close to about -- about 40% to 50% depending on the composition of the project in what is localized.

Understood, sir. My second question is, sir, of course, we are [indiscernible] the energy transition and renewals become higher and higher in the proportion in the grid. But do you think there's a gap in any product portfolio? Do you think we need to bring some of the products from maybe Europe to the India to meet the demand for Indian market? And the product which maybe -- may not going to apply and would like to localize?

So Mohit, just to update, I think probably whatever is manufactured in Europe for GE grid solution is with the exception of one or two products. Of course, there the global requirement is so small that it is a [indiscernible] only to have globally [indiscernible] to factories. Everything is manufactured by GE T&D in India. So for example, if it's transformer [indiscernible] controlled in the panels, relay, circuit breakers, gas insulated [indiscernible]. Everything that is manufactured globally is manufactured in India. So if I really look at the footprint point of view, we are close to maybe about more than 95% of the footprint, which got manufactured in India. Of course, into this, there are certain products, which, for example, today have a demand more in Europe like GQ and all. Today the demand is not there, and we are in discussion with lot of customers to promote GQ. I think once the acceptability of that product will start, when we have a full fledge factory to only add in the product lines. So it's not requiring any major investment in terms of that. So if that answers your question.

It does, sir. My third question, what kind of product you have in the industrial segment, especially on the refineries and data centers? Or something that you recent just collaborate on. Is it primarily related to electrification? Or is there something else you...

It is primarily related to transmission side only. For example, we have transformers, we have circuit breakers and [indiscernible], GIS. So a normal products -- the normal products which are used in substations. Data centers or, for example, refineries, they are highly power-intensive applications. So normally for high-power intensive applications, we -- connection would be either at 220 kV or 400 kV. And there, they would be requiring a lot of transmission products as an input to the industry. So that is where is our play.

Understood. Last question, sir, how is the market outside India in the sense, how is Southeast market, Asia market looking like? And do we have an opportunity to participate in those markets? And related question is, is there any export which can happen from the Indian market in the near future, yes?

So if you really look at our order portfolio, I think constantly, if I'm not mistaken, we -- our order portfolio consists of about 30% or slightly more than 30% as the order composition, which come from the export market. In the smaller countries, the traction of renewable has just started, and it's not great. But consistently, those countries are also investing in terms of upgrading their transmission infrastructure. So that's a stable market or I would say, slightly growing market which is there. And of course, our endeavor is to get qualified the Indian factory for more and more export geographies. So that's a constant effort, which we keep on doing in most of the geographies.

[Operator Instructions]. Next question is from the line of Raj Rishi, Individual Investor.

Yes, can you hear me?

Yes. We can hear you.

For the HVDC projects, I believe you have competition from Hitachi, [ Siemens ]. So how do you place yourself in terms of the offering versus your competitors?

So, Raj, if I compare ourselves, for example, in the market today, at least in the Indian market, I would rate ourselves as -- in the Indian number of installed base, we are the second largest player in the country. And as far as the offerings are concerned, our offering is as good as any of our competitors' offering, whether it is Hitachi or whether it is Siemens.

Okay. Okay. And a lot of restructuring happening at our parent level. So how will that affect this particular company?

So this restructuring that is happening is basically that -- I can say that we are seeing GE globally -- the earlier we were a conglomerate of 3 companies -- not companies, but 3 businesses, which was health care, aviation and the power business. So ultimately, what's happening from 1st January, '23, health care has become a separate company, stand-alone on its on. From -- it is expected by the end of this year, aviation and the power portfolio, which is called Vernova will be again stand-alone company. But apart from that, we don't expect anything because our portfolio and our technologies and everything remain in the same basket.

Okay. Okay. So there was some talk about GE moving away from fossil fuel, et cetera. So in your company, there is no reason for the parent to change hand, right?

No, no. we are purely on the grid side. So we have no role to play in fossil fuel technologies and things like that.

[Operator Instructions]. The next question is from the line of Aniket Mittal from SBI Mutual Fund.

So the first question is just coming back to the Leh project. Typically, see, the HVDC projects are have been a good margin business and the project in Leh that's coming up is also an RTM one, whether the developer that's building in can easily make cost escalations over there. Unlike, let's say, [indiscernible] that's coming in that would be on a TBCB basis. So you did highlight on the risk part [ and you saw it ] and you've decided to participate. If you could just elaborate a bit more on that, then that would be helpful.

So Aniket, thanks for the question. But if you really look at even the transmission normal projects which come on TBCB route, in these cases, also, for example, there are standard transformers, reactors and other products as well, where you have the risk of price escalations and things like that. So mostly the developers who are participating in these projects, they know how to manage those risk. So I think I will leave it to the developer, how do they manage the risk, but I don't see any challenge in participating in a TBCB project for HVDC from an OEM perspective.

But given that this is an RTM, and I assume, and like I said, it could typically, we've paid good margins in this business, and some of that benefit also trickles down into operating leverage. Just wanted to get a bit more clarity on what made us opt out over here.

As I said that the tenders have not yet come in, so we have not said that we have opted out. We have just said that, okay, we have -- as of today, we have not participated in the FEED study because the FEED study will require the specifications to be formed, et cetera. But we always have a right because once the tenders come out, then we can always participate in those tenders because those tenders, based on the qualification requirement, we do qualify. So I have not said at any point of time, that we are not going to participate in [indiscernible].

Okay. Okay. The second question was on the gross margin front. So if I look on the gross margin this quarter, they've come down sequentially a fair bit. Just if you could highlight a bit on that. And from an, let's say, FY '24 perspective, what is the steady state gross margins that we can [indiscernible]?

Yes. So Aniket, this is Sushil. You're right, Q4 gross margin was around 26.5%, and this was impacted by 2, 3 factors: first was inflation on the electronic parts, mainly semiconductor that we use for our -- one of our businesses; and in couple of projects, some customers applied liquidity damages, which we believe if we can contest -- and we'll contest these liquidity damages with the customer, but on a conservative [indiscernible] or a charge in the P&L for the quarter. And the third is the mix of projects that were traded in this quarter. As you are aware that last year, we took commodity price inflation impact on many of the projects. And some of these projects have become now low margins and are getting traded in the current period. Overall effect would be 3 factors as an impact of around INR 250 million. However, if you look at the full year number, full year numbers, we achieved around 29% of gross margin, which has been improving from 22.6% in the earlier financial year, and this is in line with where we had called out a number on gross margin for the current financial year. On the question around the next financial year, and I'm not give you guidance, but I will say that our endeavor is always to improve the margins from here on, considering all the efforts, whether it is through mix of project or better pricing and efficiency or productivity, we'll take endeavor to improve it further.

Okay. Fair. Sir, just for the INR 250 million, I think roughly we're a bit 30% gross margin mark for this quarter as well?

Yes. But I'll request that let's look at the entire year. And I'll not call these out as exceptional because these are the business-related expenses. And technically, if you would like to adjust for a comparison, fine. But overall 29% for the financial year, which we will endeavor to improve.

The other question was just to understand on the addressable market. I think you did mention that, that stands at close to INR 25,000 crore for this year. What was it, let's say, last year, what's it this year? And how do you see it going, let's say, over the next 2 years?

So I think the next year, probably one of the factors that could be there is that the last quarter will be seen the general [indiscernible] also happening. So probably, we like to see that where do we land in terms of the next year markets in [indiscernible] because like the last quarter has a lot of projects which get divided between [indiscernible]. I think apart from that, but looking into the growth story of India in terms of renewable and in terms of permit of transmission, we are pretty confident that the market is going to grow maybe at a pace which will be about, excluding HVDC, might be growing at a pace of close to about 7% to 10% every year.

[Operator Instructions]. Next follow-up question is from the line of Subhadip Mitra from Nuvama Wealth.

So like you gave us a sense on the gross margin part, I just wanted to get a sense that if I am to look at, let's say, the next 2- to 3-year scenario, on a normalized basis, is there any target range of, let's say, EBITDA margins that you would be shooting for?

Subhadip, we don't give forward looking guidance on a specific number target in the investor calls. But as I said, and Sandeep talked about, endeavor for increasing the orders. I talked about endeavor for increasing the gross margin. Further improvement in the cost structure. These are the measures that we'll take to improve profitability, but I'll kind of refrain from giving a number target.

[Operator Instructions]. Next follow-up question is from the line of Aniket Mittal from SBI Mutual Fund.

I just had one question. So you had mentioned that apart from the utility side, you're also working on data centers and refinery.

Yes. Sorry, Aniket. Can you repeat the question?

I said apart from the utility side, you're also working on data centers and refinery. How large would that be, let's say, of your order book and revenue, the ex utilities business?

So data center market is probably the order intake what we have today is not a very large part. We have few orders of GIS and automation, which we have taken, but not a very large part.

And the same would be for refinery as well?

Refineries and all, yes, we have been able to -- at least not in the last year, but prior to that year, we have had a substantial order intake. So that also depends upon the kind of investments which are coming from the refinery. For example, when the government directive came for [indiscernible], most of the refineries went for expansion, and then we took a large part of that market. And so last year -- not -- yes, last year, we had a large order from the Reliance Industries as well, so depending upon the market which is available. But I would say that in the oil and gas market, we have had some good successes in the past.

How much would that be of your current order book [indiscernible] segments?

It would be close to about 7% to 8% of the overall order intake what we have.

[Operator Instructions]. As there are no further questions, I will now hand the conference over to Ms. Tanvi Gupta for closing comments.

Thank you all, for [indiscernible] GE T&D India Limited Earnings Call. We hope the insights provided by our speakers have been informative and valuable to you. We value the trust and support of our investors and analysts. And we remain committed to delivering transparent communications and fostering strong relationships. If you have any further questions, or require any additional information, please do not hesitate to reach out to me or our Communications Leader, Anshul Madaan, at the mail IDs available at our company's website. Once again, thank you for your participation in today's call.

Thank you very much. On behalf of GE T&D India Limited, that concludes this conference. Thank you for joining us. You may now disconnect. Thank you.