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

Ladies and gentlemen, good day, and welcome to GE T&D India Limited Quarter 4 and year ended March 2024 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Megha Gupta from GE T&D India Limited. Thank you, and over to you, Ms. Gupta.

Good evening, everyone. A very warm welcome to the GE T&D India Limited Earnings Call for the fourth quarter and financial year ended March '24. I'm Megha Gupta from GE T&D India Finance and Investor Relationship team. Today, we have with us Mr. Sandeep Zanzaria, CEO and MD of the company; Mr. Sushil Kumar, Whole-Time Director and CFO of the company; Mr. Abhishek Srivastava, Head Business Operations; Ms. Kanika Arora, Communications leader, Ms. Anupriya Garg, Company Secretary of the company. During this call, we will discuss company's financial performance, including operational highlights. We will shortly update, will address any questions that you may have. Before we begin the call, I would like to highlight a few important news for today's call. Firstly, we have just declared results for the fourth quarter and financial year 2024. The said results are now available on our company's website. Further, we have also prepared analyst presentation for the quarter, which will be discussed during the call. Also, I would like 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 vary 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 our future performance. Towards the end of the presentation, we'll be having a dedicated question-and-answer session. Thank you once again for joining us today. We appreciate your continued support and trust in GE T&D India Limited. I'll now hand over call to Sandeep for his opening remarks.

Thank you, Megha. Good evening, everybody. Appreciate you taking time to join us for today's call and continued interest in GE T&D. So I'd like to begin by sharing that we are incredibly proud and excited, but GE Vernova is now an independent company having completed our global spinoff. This significant moment builds on more than 130 years of industry leadership and signals the tremendous opportunity to collectively accelerate the energy transition. GE Vernova is purposely built to meet this challenge with its products and services designed to generate, transfer, orchestrate, convert and store liquidity in order to create a more reliable and sustainable electrical power system. GE Vernova electrification business of fit GE T&D startup electrified the world with advanced grid technologies and systems enabling power transmission and distribution across the power grids and supporting a decarbonized and secured energy transition. India is poised to witness the fastest growth in electricity demand among major economies according to the international Energy Agency Report. The Indian Power Transmission segment has grown significantly over the years to cater to this rise in generation capacity and power demand making the country's electricity grid as one of the largest synchronized grids in the world. The big growth driver is the need for grid stability and flexibility in use of renewables, reinforcing, modernizing and automating the grid with right equipments and grid storage, power for control, reactive power equipment is mission critical to maintain the stability. GE T&D is a major player in the transmission sector in India, and we are totally geared up to exploit the finding demand that being generated through energy transition and digitization. One of the other key growth drivers for us will be the India's data center market, that is 1 of the most generic markets in the world and is witnessing several new investments from local and global operators. With this background and rising demand in global and Indian market, we are excited to share a continued search in our order book in Q4, which saw bookings of INR 13.3 billion, up by 53% year-on-year compared to INR 8.7 billion in the quarter ended March '23. We have the key orders that we received were from power grid to the State Transmission Asset Management Center for Odhisa, supply of GIS for data centers in Maharashtra and Andhra Pradesh. For FY '23-'24 our order booking was INR 57.9 billion, compared to INR 27.4 billion, up by 112% year-on-year. This strong order pipeline helped us to improve our order backlog to INR 62.7 billion, as against INR 37 billion of last year, an impressive increase of 70%. Our Q4 revenue stood at INR 9.1 billion, vis-a-vis INR 7 billion in Q4 FY '22-'23, up by 30%. This also included a notable increase in our profit on the FY basis, our '23-'24 revenue stood at INR 31.7 billion, vis-a-vis INR 27.7 billion, up by 14%. Our profit before tax and exceptional items was at INR 1 billion compared to INR 43 million in the corresponding quarter of the previous financial year. From an FY '23-'24 perspective, profit before tax stood at INR 2.63 billion versus INR 381 million in FY '22-'23, which is an increase of 23x. This improvement in profitability and balance sheet paves the way for the company becoming debt-free. The cash and cash equivalent balance stood at INR 2,765 million as of March 31, '24 versus INR 1,573 million as on December 31, '23 of our previous quarter, and a net debt of INR 1,730 million as on March 31, '23. The cash generated for the Q4 was INR 1.19 billion, and for the year was INR 4.5 billion for FY '23-24. We are also pleased to inform to our shareholders that the Board has recommended a dividend of INR 2 per share after a gap of 5 years, which is subject to shareholders' approval. GE Vernova is committed to develop customized technologies that allow us to secure trust from our customers. From power grids, we developed 2 gigawatt bipole evacuation systems STATCOM Solutions, full range of grid stabilization solutions. We offer FX3 switchgears contributing to the standards of the grid industry. Utilities are moving away from doing the grid of something that we operate with manual operations to a much more modern architecture that gives them the ability to see the entire grid and orchestrate for variabilities. With this critical demand driver, you see a robust addressable market for our energy-focused software business, especially for GridOS, which is a highly differentiated offering and the first of its kind. Lastly, we continue to focus on deploying our new operating system to reduce lead times, reduce our cost and expand our production output. In the coming years, the nation's commitment to achieve 50% of its electricity generation capacity from nonfossil sources by 2030 will necessiate substantial investment in both interest rates and intrastate transmission network. With ongoing investment in grid modernization, capacity expansion and integration of technology, the future outlook of the country's transmission segment is promising. These initiatives will not only enhance grid reliability, but will also support the government's ambitious goal of increasing renewable energy capacity and reducing carbon emissions. We could not be more excited about the path ahead and we thank you for your continued support. I now invite Abhishek to talk about the operational.

So thanks, Sandeep. Good evening, everyone. I will just quickly take you through the key operational highlights for GE T&D. In the quarter 4 of the financial year '23-'24, we partnered in development of the transmission network of our country. And in these 2 key milestones were achieved. One was the commissioning of Renew Koppal Phase 2, which is the first TBCB project for our customer renew, and this is the largest interstate grid connection for Southern part of India. Another key milestone was commissioning of 220 kV GIS for Adani Kutch Copper Limited and this was, again, a great sense of satisfaction for us in terms of participating in setup of 1 of the largest single point copper manufacturing facility, and this project was done in a record time. So these are 2 key highlights, and I hand over to Sushil to take us forward.

Thanks, Abhishek. Talking about the financial performance and first highlighting the orders achievement. So this financial year, we booked INR 57.9 billion of orders, this was 112% more than the order that we booked in the last financial year. During the quarter, we achieved INR 13.3 billion of orders, which was 53% higher than corresponding quarter in the last year. If you look at the investor presentation, it's important to note that every quarter in this financial year, the order booking number was significantly higher than what we achieved in the quarters -- coming quarters of the last financial year. The orders that we achieved are basically coming from different head of customers, which include the central PSUs. State utilities, developers, EPC companies and so on. And also, we have made a significant improvement in the export orders during the year. In terms of the financial performance, this quarter, we achieved INR 9.1 billion of revenue, about 30% higher than corresponding quarter in the last year, whereas on a full year basis, we achieved a revenue of INR 31.6 billion, about 14% increase versus the last financial year. However, a very important improvement is in the EBITDA level, where we have about 12.8% EBITDA for the quarter, a significant 8.3% improvement, 8.3 points improvement versus the corresponding quarter in the last year. And on an overall basis, the EBITDA for the financial year was 10.8%, about -- which represents about 5.9 points increase versus the corresponding last financial year. Similarly, like we have a significant improvement in the EBITDA, and we have this year become debt free and we do not incur the financial charges as in the earlier financial year. The performance and improvement in the profits before tax and exceptional items and profit after tax is higher than what we see in the EBITDA level. The details of which are already given in the presentation. In terms of some of the highlights, as highlighted on the Page 8 of the investor presentation, with respect to the split of order book and revenue through export and domestic business. Overall, for the financial year -- the overall INR 57 billion orders that we booked, 68% of the orders were from domestic market and about 32% orders from the export market. On the remaining front, on the entire financial year, out of total [ INR 31.6 ] billion of revenue, 69% of the revenue is from the domestic market and about 31% of revenues from the export side. End of the financial year, we have about in the backlog of INR 62 million, which has basically 63% coming from the private customer, State utilities have about 10% share and about -- Central utilities have about 27% of the backlog orders we have with us. So with that, we can now open up for the questions.

Thank you very much. [Operator Instructions] The first question is from the line of Mohit Kumar from ICICI Securities Limited.

Congratulations on a good quarter and consistent improvement in margins sir. So my first question is on the order inflow. Of course, last year was stupendous, but as you go forward, how do you see the next 12 months from ordering point of view, given the sharp bidding activity in the interstate transmission system.

So thank you for the question. And yes, we look with the momentum, which has been built in the past year in terms of order intake. We expect the momentum to be there, and we are looking at closely monitoring the situation because we see a number of transmission projects which are under finalization now where the reverse options and things that are happening. We are looking at the -- sustained '24; '25 as well.

My second question is I believe that we do not have any STATCOMs under installation in India. Are we in the process of indigenizing the STATCOM and start looking at this opportunity in the future?

So yes, you are right, Mohit, that today we don't have a STATCOM order, which we are executing in India. But definitely, globally, we have a portfolio of STATCOM. Recently, there was an announcement of [ GE Vernova ] STATCOM in Taiwan as well. So yes, we are closely watching this market and then we have invested with few customers as well. So yes, we would be present in the segment as well.

But can -- you can execute right now? Or think it will take -- you can't execute now? If any order is available, you can't take it now. Is that a fair assessment?

We can take and execute.

Okay. Understood, sir. My third question is, given that there are large 3, 4 HVDC lines, which are about to be tendered in the next -- starting from the next couple of months to Leh-Ladakh. Is it fair to assume that we can execute at least 2 of them at 1 instance? Or do you think that the [indiscernible] large and we can only do 1.

I will not be able to comment on that whether we will be able to do 1, 2, 3, 4. But yes, we are a global player of HVDC and definitely, India remains a very important market for HVDC is concerned. So, yes, we have committed to Indian HVDC market.

The next question is from the line of Parikshit Kandpal from HDFC Securities.

Yes, congratulations on a great quarter and the year, sir. My first question is on the order bookings from the parent. If I remember correctly, last call, we had said that total exports of INR 1,600 crores to INR 1,200 crores was related party orders. So now -- and we have taken approvals of almost INR 2,800 crores, I think INR 1,000 crores earlier and then later on, we followed up with another INR 1,800 crores of orders. So just wanted to understand from the ordering point of view, what has been closed out of the new INR 2,800 crores of RPT approvals we have taken in this financial year? And how much of these orders are expected to come in FY '25?

This is Sushil. Basically, when we talk about the export segment. And this time, as I mentioned, we have done about INR 18 billion of orders from the export segment out of the total INR 57 billion of order booking. And you rightly mentioned that almost 75% of these are coming from the -- sorry, 65% to 75% are coming from the related party of the group entities. In terms of the subsequent approval that we had taken as a related project services, those contracts are still under discussion and negotiation and the related party of other group companies are participating in further tenders with the third parties. If they win, and we are able to negotiate with the related parties, we expect to have a momentum in the first half of this financial year.

Okay. And sir, again, second thing is that we have seen our parents, the Vernova electrification equipment business, the order backlog has been growing like from CY '21 of $5 billion, now it is almost at $13 billion (sic) [ INR 13 billion ] at the end of CY '23. And I think at the end of 1Q, CY '25 it is already INR 18 billion. So do you think that this trend of related party transactions on the order booking side, we will see continuous uptrend on this, at least in the near term, given under investments in capacity building globally.

So the market is strong globally as well as in India. And wherever we get the opportunity, we'll continue to focus on that and convert that opportunity into order. As and when we get further opportunities from the group parties then definitely would like to have more and more from the related parties as well.

And sir, will these orders be at a better margin. I mean given -- you have mentioned in the past that export orders do have better margins. So when we take -- now these export orders are sizable from the parent point of we have 65%, which you highlighted, 65% to 70%, but are these margin dilutive to the India business? Or will you have similar EBITDA margins?

Yes. Generally, the export orders margin are better than the margins that we get in the India business historically. But India market, the pricing is also improving, and the margins are also becoming better now. So depending on the season or the business line in some business lines we get better margin at the India level as well.

Okay. And just the last question, sir, on this HVDC side. So I mean recently have been -- BHEL on today's call said that they have entered a joint venture with the international companies. So is it GE? Or if not then whether are you looking at tying up for HVDC joint venture or directly bidding for these orders?

So, Parikshit, we will not be able to confirm or deny anything because these are all individual strategies in the market, so sorry.

Okay. But we are open to directly bidding also, sir? I mean, are you open with both the options I mean looking at the joint venture with anyone else or also directly bidding without naming anyone?

I will not comment on whether we are bidding in consortium or bidding alone. But yes, we are very serious, and we will be an important player in HVDC in India.

And just Sushil, just 1 thing on this tax, there is a high outgone tax -- I mean, this quarter, especially the tax rate is highest. Is there any one-off, I think you have taken some tax provisioning for previous services. If you can help us clarify why the tax rate is so high in this quarter?

Yes. As you see the profit and loss statement that we published to stock exchange, we have already classified INR 85 million of tax related to the earlier year as a separate line item. So that's a one-off item.

But what is the reason behind it? So I just wanted, I've read that note, but what was this pertaining to? Was there any assessment or anything?

Yes, it's pertaining to the, let's say, review of the available tax balances and the probability of getting those from the tax authorities, basis the internal as well as external approval that we have taken. But I can confirm that this is a one-off item in the P&L.

The next question is from the line of Renu Baid from IIFL Securities.

Congratulations for a very strong performance. Sir, my first question is just to understand on a broad basis, now that you mentioned Vernova is a separately spinned off entity. Does it have any material implication on the way the operations have been run at GE T&D India or any strategic decisions for the India entity or business remains the way it was there under last quarter or so?

I think operationally and strategically, at least I can say that the business remains as it is. But the advantage of, for example, when it was a very large GE, but today, when it becomes Vernova, we are a very energy-focused company. So definitely, the time probably because we are just very new, like second of April, we became Vernova and today, we are in May, but I think with a lot of other businesses of Vernova, we will now be looking at more operational how to integrate and try to address more market markets that will be a strategy, which we would be exploring in [ tandem ].

Got it. Secondly, from an order book perspective, I know you've commented earlier, but if you see the highest inflows in the past decade that the India entity has secured an order backlog was in absolute level is back to 2019 levels. So ex of the HVDC export order, which you mentioned was a longer gestation cycle project, what would be the average execution of the current backlog that we have, excluding the HVDC export?

Well, to -- so depending on the product that we sell, it ranges from 12 to 24 months.

Yes.

Got it. Okay. And on this backlog, also especially the last 6 months, at least domestic market has been extremely favorable for the equipment vendors and pricing has seen material improvement. So you think the gross margin that you were able to report in fiscal '25, 35%, which was a reasonably healthy level, that should be maintainable? Or do you believe there could be some headroom for improvement from further on from these levels as well, given that business is still product heavy compared to projects?

So I'll say here that business is -- on the strategy, we are more product heavy than the project. So this is 1 change in strategy, what we have done. And we have been telling, we have been -- in the various investor calls, we have been telling that this is the strategy. That is 1 thing. And yes, definitely, the whole organization works for the improvement of margin. It is not that whatever we have won is something that we are happy with it. So through lean, through sourcing savings, through risk mitigation, all the levers are put into place to improve the margins. So I think we're pretty confident that, yes, we should be able to do a much better '25.

And related to this 1 more question lastly on this side. In the last conference call, we did highlight that potentially the India entity could win another INR 1,000 crores kind of order from the group for HVDC exports, and we were expecting it somewhere around April, May. So is that order very well on cards and could be expected in the near term? Or it would be again subject to certain wins from the parent group entity?

Renu, I answered this question when Parikshit asked the same question. First of all, we didn't declare, just as a clarification, that it's an HVDC order. It depends with the various products that we manufacture in our factory. The second part, as I mentioned, adjusting the [indiscernible] of the global entity -- maybe parted from the customer as well as internal income by GE T&D from the group entity, because we are not the only one who manufacture these products. But, yet, if I see seriously on order, and we are basically trying our best to get more orders in the export market as we have been focusing both domestic as well as export market to increase our order book and utilize maximum capacity of the plants that we have. The time line for it -- just to add on, the time line remains same in the first half of the -- this financial year will have the outcome of decision.

Got it. But strategically, if we see which other product lines within our fold, you think may have a higher chance of winning fresh mandates from the parent apart from HVDC range, given that globally the value chain and the supply chain for a lot of power grid equipment are stretched. And in addition to the product lines, which markets -- which new markets in your view may open up for India, the way the Korean markets have opened up recently through the parent entity? That's the last question from my side.

So, Renu, we are, I think 1 of the things is that definitely the markets are opening up because the energy transition story is very strong in many geographies. And also we are getting allocated newer markets, which are there. And definitely, we are looking eagerly towards the outcomes of these divisions, which are there, which is coming with the end customers. That is one thing. And second, it is -- so when we talk about HVDC it is not on the transformer, but as Sushil said, that we have never said that these are only like HVDC opportunities which are, it could be normal substation product opportunities as well. So -- and for a product different like the AIS, GIS, there is a good amount of localization done in the country itself. So we are not so heavily dependent on the outside supply chain. Definitely, there will be a few critical components, which are going to come from the offshore vendors. But then a large part of those supply chains are also localized. So -- which makes the challenge a bit less, I would not say that it's totally like a 0 channel, but it really reduces the challenge in terms of the supply chain as well for the other products.

The next question is from the line of Moksha from Agility Advisors.

So I wanted some clarity on the STATCOM part. How big is this opportunity for STATCOM in India?

So we're looking at about -- close to next 2 to 3 years, we're looking at about 15 to 20 STATCOMS to be put in India. And individually, I think 1 project, it depends upon rating because the rating of STATCOMs are different, so that's why the total configuration will be totally different. But each STATCOM project and rate going somewhere between INR 200 crores -- sorry, INR 250 crores to about INR 500 crores.

I would ask a few more questions on the STATCOM basically. So what -- where is this required in the entire value chain? Where is it placed in the entire power value chain?

So basically, these STATCOMs are installed, wherever we have requisitions from renewable sources. So in the transmission network, these STATCOMs are being installed.

So are these going to be installed in the new transmission lines for the renewable energy? Or will these be replaced?

There will be new. So for example, the new substations which are coming under TBCB. So there at the exit substations, we -- along with the substations the STATCOMs have been installed.

Okay. So these are basically installed with these substations?

Right.

In the transmission as well as distribution? Or just the transmission substations?

Only transmission.

Okay. And how was this requirement of STATCOM fulfilled earlier in India?

When the generation was lower from the renewable sources, anyway, reactive power compensation was not needed to this level. So earlier, the sources were mostly fossil fuels, thermal power generation and hydro where you don't need these STATCOMs for compensation to this level. With the renewable power coming into play now the requirement of reactive energy has gone up, so you need dynamic devices such like STATCOMs, to enable that flow of energy. So this is something which is because of huge -- in growth of the renewable generation.

Okay. So is it just like the STATCOMs that are getting installed, is it -- there's a mandate or something that has to be made or it's just a requirement?

So this is a mandate which is coming from -- so this is a mandate which is coming from the grid operator as well that along with the substation you need to put the STATCOM.

So are there any alternatives for the same currently, which are being used or which can be replaced.

So there are other technologies which are there globally. But in India, now the STATCOM is the preferred technology.

Okay. these are my questions.

The next question is from the line of Jonas Bhutta from Birla Mutual Funds.

Congratulations on a great set of results. A couple of questions, Sandeep. Basically, while we appreciate that the sale of the business has become product heavy in the last few years, what would be the broad breakup of sales between products and projects as we speak?

Please give me a minute to get the information.

And if I can just carry on, so while you get that data. Additionally, I just wanted to understand if at all we were to sort of split the project side, would transformers and switchgears be the 2 major key products within that subset?

So normally, switchgear is a part of the projects which we deliver. But transformers are not part of the projects normally we deliver because today, all the -- whether it is utility private customers, they buy transformer reactors separately and projects separately.

Understood. And what would be our nameplate capacity for transformers after we exited many?

That's what I say that transformer capacity, I will not say that -- so what happens is that how many what complexity of transformers you manufacture it depends. Suppose, for example, maybe an HVDC platform or when you manufacture, maybe it might be a 300 mVA but the cost of the 300 mVA transformer would be like for a normal 765 kV, it would be about 3x of that cost. So mVA is not basically -- of course, it's a very high-level reference which is there, but actual reference is that what kind of rating and how many transformers and reactors combination, including HVDC, including, for example, STATCOM. So it all depends upon complexity and a different, for example, a 3-phase 500 mVA, single phase 500 mVA, is very different. So that's why we say that we don't want to measure ourselves in terms of mVA capacities.

I would have assumed that it would be 18,000 to 20,000 mVAs, is that a ballpark range where we are on an installed capacity basis?

Yes, I would say that's a fair guess.

Okay. And the -- what I was trying to triangulate to was that at some point in time, I think a couple of years back, you mentioned that as an entity, as we move to products, we would do peak revenues of anywhere close to INR 40 billion to INR 45 billion, we are at about INR 31 billion. Given the share of the order book and the sales mix, which is HVDC heavy and progressively will get HVDC heavier. You think that 2 years, 3 years out, that number could be breached just because from a sales mix perspective.

So I think this will be -- Jonas, it will be a forward-looking statement, and we would like not to comment on this.

The second question, do you want to give the breakup of the project versus product? Or can I proceed to my second question.

Yes, Jonas, I have the information. So projects will be about 30% of the total INR 31 billion that we achieved in the last financial year. And the rest 70% is from the product, servicing and other businesses.

Understood. The second question, and then I'm going to harp on the HVDC bit is, from a competitive positioning, if you see one of your MNC peers has tied up with a local player and combined, they would probably have 50,000-plus mVA capacity to sort of cater to for an HVDC project, while we, on a stand-alone basis, along with the parent who's already choked with orders is, in fact, reverse outsourcing to us. Does that put GE T&D at any disadvantage from just the sheer time lines that it can deliver a particular project, the early-stage projects of Fatehpur-Bhadla and Khavda-Nagpur. We may have open capacity maybe for Leh-Ladakh and Khavda-Olpad, but at least in the first 2 projects, do you believe that you are at a disadvantage in that sense?

So I will not say that we are at a disadvantage because at the end of the day, normally, so if you would have seen our path. So normally, we are not trying to build a further risk into the company. So we will be attempting and we will be targeting projects which are within our capacity only. But I will not be able to comment today that whether we are at a disadvantage or whether we are at the advantageous position because HVDC is not only transformer capacity, but there are a lot of other factors also included in an HVDC project, which includes the global leading factors and other factors as well, also the amount of localization and -- so there are a lot of factors which are involved into an HVDC I would say pricing and things like that. So on the competitive side, it will be very difficult to comment, Jonas.

Sure. And's just last quick one. Fatehpur-Bhadla since the bids have been put in, what is the execution time line as per the bid as in tender, sorry?

It is 48 months for the first 3,000 megawatts and 54 months for the next 3,000 megawatts.

Understood And all the very best to the team.

The next question is from the line of Prathmesh Salunke from [ DL Capital ]

So I had a question on the capacity side, okay. So saying we had like 18,000 to 20,000 mVA variable capacity. Just wanted to know, are there any capacity expansion plans in the books right now?

So Prathmesh, thank you for the call. So this was not -- I said that this 18,000 to 20,000 mVA, but Jonas views that we have 18,000 to 20,000 mVA. So we have a very globally few [indiscernible] following GE Vernova. There is a very strong culture of the lean implementation through which we keep on working on how to expand the capacity through debottlenecking and through improvement of process sales and things like that. So we keep on working on those things and we also keep identifying that what are the bottlenecks and then trying to see how this will be addressed to expand the capacity.

Okay. Right. I understand. So sir, I just wanted to know, is there any capital expenditure plans? For not capacity expansion, but anything else?

So if that will be there, then we will be anyhow declaring that officially to all our shareholders at the same time. So it is not -- we would not like to comment anything on the industry call on this subject.

Sure, sir. I understand. So the last question is, is there a possibility to give me execution percentage right now for the Vadodara plant to be precise...

Sir, can you repeat the question?

So I wanted to know the capacity utilization for specifically Vadodara plant, because if I'm not wrong, all the transformers come from our Vadodara plant. So yes, I wanted to know the...

I would say there that it is pretty occupied, but it is very difficult to comment in terms of whether like it is 92%, 72% or 62%. So there are a lot of operational efficiencies, which we measure. But from a market perspective, it is very difficult to comment on such numbers.

Okay. So it's pretty high, basically more than 90%, would you say?

No, that I will not say.

[Operator Instructions] The next question is from the line of Inderjeet Singh Bhatia from HDFC Securities.

A few questions from my side. First is, you mentioned projects being 30% of the order book right now. What was the corresponding number at the start of the last financial year?

Mr. Inderjeet your question was how much of the revenue comes from the project business since the last financial year. So it was revenue on number of credit -- order booking number of credits.

But is the order book mix be similar now, 30%, 70%.

It will be lower. I don't have the exact number, but it should be lower.

Okay. Second is on the revenue side. I recollect in quarter 4 -- but I think quarter 3 calls, you talked about starting to accelerate from quarter 4 [indiscernible] on track.

I'm sorry, Mr. Bhatia, we are losing you in between. Maybe request you use the handset in case if you are using the speaker.

Sure, sure. Is it better now?

Much better, sir. Can repeat the question again .

Yes, I was saying that in the -- I think quarter 3 call, you had talked about revenues catching up with your very, very strong order book growth from quarter 1 onwards. Is that still on track? Because last year, we had done 48% revenue growth while order book growth is very, very significantly compared to that.

So I'll answer it differently. I think year-on-year comparison of 14% is 1 dimension to look at this number. But the other dimension is to also look at from the last year same quarter, wherein we have delivered 30%. And if you look at the last few quarters, then every quarter, we are delivering higher revenue than in the past. So of course, we have a $62 billion -- sorry, INR 62 billion of order backlog, which has a specific execution time line as for the customer contract. And in the earlier question, we explained also the time line was really strong in the first 12 to 24 months. Since this is the customer contract, we will definitely [ completely ] with it. And hopefully, we should be working to increase our revenue as much as possible as per the contract standard.

Got it. One question on the cost structure. So if I look at on a quarterly run rate, your staff cost and your other operating expenses is roughly around INR 200-odd crores. What part of this is fixed cost and how much is variable out of that? I'm assuming staff is definitely is fully fixed.

Sorry, go ahead.

The staff would be fixed, I'm assuming. And then other operating expenses would have a mix of that. Can you share any color on the breakup between fixed and variable.

I don't have immediate breakup, but we can on a very high level, takes about 50-50 ratio.

Got it. And how are -- on a manpower wise, how are we staffed right now? Do we have -- do we need to kind of ramp up recruitment very significantly? Or you're well staffed towards the order book that we have.

So I would say that we are adequately staffed. But depending upon the orders what we are taking and things like that, there is a plan which is always under the review. And whenever we think that we are going to meet people, so there is a plan to add them.

Got it. One last question from my side. I'm sorry to nitpick. But just looking at the quarterly trend, especially in the last 2, 3 quarters, our gross margins were around 36% in quarter 2 and quarter 3. They've come off to 33% in quarter 4. Is there anything to read in it? Any onetime or any legacy orders getting closed or any mix change?

This particular analysis, we have been talking almost every quarter that in terms of gross margin, it's better to look at the entire year performance. On a full financial year basis, we achieved a gross margin of about 33.5%, which was 5.5 percentage points higher than the last financial year.

Got it.

Every quarter, it depends on the mix of different businesses that we do different products and different contracts. So that can vary a little bit. But overall, we have made a very significant 5.5 percentage point improvement in the gross margin in the entire financial year.

Definitely, definitely. Best wishes for the future. And congratulations on great numbers.

Thank you Inderjeet.

[Operator Instructions]. The next question is from the line of Dhruv Agrawal from Niveshaay Investment Advisors.

Sir, I have just 2 basic questions. Sir, firstly, I wanted to understand that if in an APC project suppose the project sizing INR 2,000 crores in the transmission segment, then how much cost is incurred on the towers, cable and wire on the substation in that INR 2,000 crores? If you can give the rough idea.

I think, Dhruv, it will be very difficult to give a rough idea because different projects have different combinations. For example, if it's a 400 kV or it's a 765 kV, if somewhere the substation is smaller, maybe 1,500 mVA, somewhere it is 3,000 mVA, somewhere the lines are longer, somewhere the lines are shorter. So this is a very project-specific breakup, which is there. So you cannot just simply take a break -- take a value and then say that this is going to be the breakup in that.

Okay. Okay. And sir, the second question would be on this STATCOM. Sir, by setting up this substations, what percentage of cost would be or what percentage of amount will be spent on this STATCOM, sir, as a percentage of stable cost on setting up these substations?

So that's what I said that the STATCOMs are normally -- STATCOMs are getting ordered separately and substations are getting ordered separately. So that's what I said that depending upon the STATCOM rating each STATCOM would be somewhere between INR 250 crores to INR 500 crores.

Sorry sir, 40 to.

INR 250 crores to INR 500 crores.

Okay. INR 50 crores (sic) [ INR 250 crores ] to INR 500 crores. This is a broader range. Sir, can you just quantify in terms of percentage, sir, if it would be possible for you?

So substation is not included in the STATCOM.

Okay. So it could be set up on which side, like you said, on the renewable side the STATCOMs are setup. So can you just quantify where would be this.

So you're asking me that where the STATCOMs will be set up.

Yes, yes.

So you have lot of projects like you have in Khavda, you will have in Bikaner, Bhadla, South Olpad. So a lot of -- wherever renewable substations are coming, STATCOMs are coming with them.

Okay. And which companies are setting up this STATCOM? Sir, is this the only GE T&D company setting up the STATCOMs? Or is there any some other players also setting up the STATCOMs as well, sir.

There are other players as well.

Okay.

Thank you. As there are no further questions from the participants. I would now like to hand the conference over to Ms. Megha Gupta for closing comments.

Thank you all for joining us today. 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 ensure to remain committed to maintain transparent communication and fostering strong relationships. If you have any further questions or require additional information, please do not hesitate to reach out to me or our communications leader. Once again, thank you for your participation in today's call. We look forward to your continued support. Thank you.

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