⚡ At a Glance

GE Vernova T&D India Ltd, part of GE’s global electrification circus, has delivered a 100%+ stock rally over 1 year, backed by a 236% YoY jump in net profit and juicy 54% ROCE. But is this a true power play or just an overhyped transformer with a designer fuse? Let’s inspect the grid.

🔌 Part 1: What the Hell Do They Even Do?

• GE T&D is your neighbourhood electrician… except it does it for countries.
• They build, install and manage large-scale power transmission & distribution (T&D) systems. Think transformers, circuit breakers, HVDC lines — stuff that keeps your AC running during IPL matches.
• Parent company? The massive GE Vernova, headquartered in the U.S. with over 75,000 employees worldwide.
• Indian entity operates under “GE Grid Solutions” and has been in the biz for 100+ years. Your dadaji probably used their switchboards.

🔍 Part 2: So Why Is the Stock Buzzing?

Let’s put some voltage into the numbers:

• Operating Margin more than doubled to 19%.
• PAT Growth has literally gone from -₹1 Cr (FY23) to ₹608 Cr (FY25).
• Free cash flow from operations hit ₹904 Cr — clearly they’ve found where the wires were leaking.

🧠 Part 3: The Shocking Past

GE Vernova’s past decade looked like a short-circuited fuse:

• FY20: Negative EBIT, -₹303 Cr net loss.
• FY22: Negative PAT, again.
• FY23: Just ₹181 Cr net profit.

Then came FY25 like a lightning bolt — margins expanded, tax payments normalized, and order books got supercharged thanks to India’s infrastructure push.

Basically: They were sleeping. Now they’ve woken up. With coffee. And probably an EV tender.

💼 Part 4: Is The Business Actually Healthy Now?

✅ Positives:

• Order book > ₹12,700 Cr, with high-margin HVDC & grid projects.
• ROCE of 54% and ROE of 40% – extremely strong.
• Cash conversion cycle dropped to 79 days from 127.
• Net debt: Almost zero. Leverage? What’s that?

🚩 Red Flags:

• P/E of ~99x? You better believe it. This is not a PSU, folks.
• Sales CAGR (5Y): Just 6.3%. They’re profitable now, but still crawling.
• Promoter stake dropped from 75% to 51%. That’s not a haircut, that’s a full-blown bald move.
• T&D projects = lumpy revenues, long cycles. One miss and… blackout.

🧾 Part 5: The Valuation Shock Therapy

Let’s break this down:

• EPS (TTM): ₹23.76
• CMP: ₹2,355
• P/E: 99x (ya, really)

Reasonable P/E? Even if we give them 45–50x due to infra hype and fat order book:

So this is running almost 2x its fair value right now. The stock is currently pricing in a future where every electric pole in India says “GE inside”.

🧲 Part 6: How It Compares with Peers

⚠️ High ROCE? Yes. High risk of de-rating if growth slips? Also yes.

🎯 Final Verdict: Is GE T&D Electrifying or Overcharging?

This stock is a live wire. Touch it, and you might either get rich or fried.

• Is the business good? ✅
• Are margins legit? ✅
• Is the price fair? ❌

It’s clearly a momentum stock with infra story premium baked in. But at 99x earnings, you’re not buying wires — you’re buying a perfect execution fantasy.

🔋 EduFair Value Estimate (FV Range)

🧮 Calculation:

• EPS (TTM): ₹23.76
• Fair P/E Range (Infra, High Margin): 45x–50x
• FV Range: ₹1,070 – ₹1,190

🔌 Current Price: ₹2,355
📉 Overvalued by ~100% (unless they double profits again next year)

🏁 TL;DR — “GE T&D India: Electrifying Margins, Shocking Valuation”

• ⚡ Margins & ROCE at record highs
• 📈 PAT tripled YoY – but revenue growth still meh
• 👨‍🔧 Part of mega GE global grid biz
• 💸 Promoters dumped 24% stake – retail’s turn to play musical chairs?
• 📊 P/E near 100 – pricing in perfection
• ✅ Great biz, ❌ overheated stock

✍️ Written by Prashant | 📅 19 June 2025
Tags: GE Vernova T&D, Power Transmission, Infra Stocks, Capital Goods, Nifty 500, High ROCE, Overvalued Stocks, EduInvesting