GE Power India Limited: Navigating a Strategic Pivot Towards Profitability and Growth

GE Power India Limited (GEPIL) has unveiled its financial results for the second quarter and half year ending September 2025, showcasing a strategic pivot that is beginning to yield positive outcomes despite a dynamic market environment. The company's focused approach on core services, coupled with significant corporate actions, signals a clear path towards sustained profitability and enhanced shareholder value.

For the quarter, GEPIL reported a revenue of INR 281 crores, marking a notable increase from INR 217 crores in the corresponding period of the previous year. This 29% year-on-year growth underscores the company's ability to drive sales in its key operational areas. More impressively, profit before tax and exceptional items surged to INR 33 crores, a substantial improvement from INR 8 crores in Q2 FY24. This boost in profitability is largely attributed to a provision release stemming from a settlement with BHEL and improved margins within the core services segment. The company's net cash position remains robust at INR 409 crores as of September 2025, reflecting disciplined cash management.

Strategic Realignment and Core Services Momentum

GEPIL's strategic realignment is centered on its core services business, a move that is evidently gaining traction. The company reported a remarkable 45% quarter-on-quarter order growth in core services, signaling a successful pivot towards higher-margin, shorter-cycle opportunities. This focus is not merely on increasing volume but on driving 'margin and cash accretive' business, a key differentiator in the current market. The core order intake for the first half of FY26 increased to INR 343 crores, up from INR 235 crores in the first half of FY25.

The core services segment encompasses a broad range of offerings, including the supply of spare parts, in-house repair capabilities, and comprehensive overhauling and maintenance for various product lines such as generators, turbines, boilers, EPCs, automation, and control systems. GEPIL is actively pursuing growth in the 'oOEM' (Third Party Fleet/Other OEM) segment through targeted repair and service initiatives, alongside 'LEAP' (Lead to Enterprise and Achieve Growth Proactively) and 'LEAD' generation campaigns designed to expand market reach and secure more Requests for Quotation (RFQ's).

Demerger and Dispute Resolutions: Unlocking Value

A pivotal corporate action during this period is the announced demerger of GEPIL's Durgapur business undertaking to JSW Energy, effective July 1, 2025. This strategic move involves the transfer of the manufacturing and supply of power boiler components, pressure vessels, piping, and coal mills. The demerger is expected to streamline GEPIL's portfolio, unlock significant value for shareholders by providing them with direct equity in JSW Energy (10 JSW Energy shares for every 139 GEPIL shares), and allow the company to concentrate resources on its retained, high-growth service segments.

In a further boost to its financial health, GEPIL successfully resolved two long-standing disputes. An amicable settlement with BHEL regarding outstanding receivables led to a provision release of INR 23 crores, with cash inflows expected over the next two to three quarters. Similarly, the dispute with JP Venture Power Limited was settled, involving a charge of INR 27 crores in the current quarter but anticipating a settlement amount of INR 25 crores upon completion of pending shipments. These resolutions significantly reduce financial exposure and enhance liquidity.

Market Dynamics and Future Outlook

The broader industrial context presents both opportunities and challenges. India's power consumption continues to grow, albeit at a moderated pace, with a 3.2% year-on-year increase to 146 billion units in September 2025. The government's revised notification limiting flue gas desulfurization (FGD) installations to approximately 30 gigawatts by December 2027 and 2028 creates a nuanced market for GEPIL's FGD-related offerings. However, the company is actively monitoring market momentum for new tenders in this segment.

Despite these challenges, GEPIL has demonstrated resilience. Its international expansion efforts have yielded success, with orders secured in seven new countries including Saudi, Turkey, Austria, Australia, UAE, Malaysia, Indonesia, and Morocco, primarily for boiler spare parts. This diversification of geographical revenue streams is a positive step. The company also secured a NOx abatement and performance improvement order worth INR 47 crores from Adani Mahan, aligning with clean environment commitments.

Financial Summary Table (INR Crores)

Note: PBT for Q2 FY25 and HY FY25 includes impact of exceptional items and settlements. Order Intake for Q2 FY24 included a significant Wanakbori turbine upgrade order of INR 243 crores.

Conclusion: A Focused Path Forward

GE Power India Limited is undergoing a significant transformation, strategically divesting non-core assets and sharpening its focus on the high-growth, high-margin core services segment. The management's disciplined execution, successful resolution of legacy disputes, and proactive international expansion efforts are positioning the company for sustainable profitability. While the overall order intake saw a dip due to specific large orders in the prior year and contract terminations, the underlying growth in core services and improved financial metrics underscore a positive trajectory. GEPIL's commitment to unlocking shareholder value and its clear strategic direction provide a confident outlook for investors.