Thank you very much. Good evening, everyone.

I hope you're all doing very well, and thank you for joining us for this third quarter '25-'26 analyst call. Appreciate very much.

Over the next 15-20 minutes, I will take you through our performance from October 1st to December 31st quarter. For your convenience, I'll refer the slides.

We have uploaded this slide deck a while ago on BSE. Today, I am joined in the room by our CFO, Ajay Singh, the General Counsel and Company Secretary, Poovanna Ammatanda, and head of our Communication, Government Relations, Seema Siddiqui.

You have seen this week, on Sunday, the Union budget, which, in our view, lays out a strong road map for technology-led growth with higher public capital expenditure and a clear push for AI, data centers, and advanced manufacturing. As in all of those things, Hitachi Energy is having a major play.

Hitachi Energy, we understand the significance of these evolving dynamics, and we are equipped and well-positioned to leverage this growth momentum. In addition to that, recently concluded EU-India free trade agreement, according to some analyst estimates, there is the elimination of tariffs on nearly 97% of EU exports to India and vice versa, slashing up to a €4 billion in annual duties and boosting supply chain integration in renewable like offshore wind.

We see this as a key area of opportunity. Simultaneously, the additional thing which came out just two days back, US-India trade deal reduces US tariffs on Indian exports to 18%.

This is also promising in enhancing our export opportunities. I move to the slide number three.

Starts from safety, which is our license to operate. Safety remains fundamental to our license to operate, and we have further strengthened interventions at our factories, our project sites, and our offices, etc.

As a result, one of the metrics we measure is the total recordable injury frequency rate is improved to 0.09, surpassing our own target of 0.1 and down from the previous year. This demonstrates the positive impact of our proactive safety initiatives.

We also reinforce our commitment to health and well-being, achieving a 90% participation in our annual health check for our employees, conducting at multiple awareness sessions, and also mental health apps. Our shop floor and site teams received several recognitions from the industry, notably, one of our Businessworld Award ranked us in the third in electronics and hardware sector.

If I move to the slide number four, ESG targets, which is a very close to us. As you know that our technology, be it a product, system, services, software, decarbonize the customer industries and customer places.

That's the reason we have set ourselves the targets on ESG front. Sustainability remains central to our strategy, anchored in planet, people, and principle.

For planet, we continue to operate on 100% renewable electricity and are on track to achieve 70% reduction in operational CO2 emissions compared to 2019 base level, significantly ahead of the 2025-2026 targets. Water audits are scheduled in several locations, including some of our locations like Halol and Mysore, to help us reach our goal of reducing freshwater consumption.

Regarding waste, we have reduced landfill disposal by approximately 30% compared to '24-'25, and now recycle more than 95% of general waste. For people, we remain committed to zero harm.

Safety is at the center of all we do here at Hitachi Energy. We are also steadily advancing gender diversity, reflecting progress across our talent pipeline, etc.

On the principles, we uphold an uncompromising commitment to integrity with a zero incidents as our standards, and also uphold highest standards of governance in our company. Offshoot of various actions and activities at our company, I am pleased to report that our progress continues to be recognized externally.

Our CRISIL sustainability ESG rating improved to 61 Strong in 2025, while NSE ESG rating close to 62. If I move to the slide number five, I think this particular thing, I'm sure you all know more than me, but I still wanted to touch base couple of things on that.

The macroeconomic environment remain favorable. All growth indicators are upward trenders.

Overall growth is strong, and inflation has been maintained steadily. If you really look at on the right-hand side of the slide, which talks more about areas, segments where it's important for Hitachi Energy, as you see that renewable, we continue to have a strong growth momentum in this, close to 50 gigawatt in 2025, but then it's quite a lot of thing.

Same is the case with the transmission. Same is the case with industry, and the data center is the one big area where we are really hoping this will really come out in a big way.

As you may be knowing, 90% of AI-ready data centers today located in the two countries, and which is US and China, and India is definitely going to have a big growth in the data center, and the data center is a very, very growth segment for Hitachi Energy in that. Then if I move to slide number six, as you can see our performance, solid performance driving growth and building profit margins.

Our operating momentum remains strong with a strong order inflows in this quarter, with most of them are base orders of ₹2,477.6 crores, which shows, if I remove the HVDC order in the previous quarter, 73% growth, and if you take a quarter-on-quarter, 11% 11% growth in that and that. Revenues are up by 29.6%, ₹2,168 crores, up by 29.6%.

Then profit before exceptional item is also quite quadrupled, almost ₹400 crores, 118.4%. PBT after exclusive items, which we talk about more, basically it's a labor code related thing in that, ₹347.8 crores.

We have a consistent and strong OCF. As you can see here, our order backlog is all-time high, ₹29,872 crores in that.

Look at the 9A nine 9-month comparison, April to December this year versus last year, is also quite strong. All even in the high base of orders, we have maintained a slightly growing in that high base orders.

Revenue is up 24% on a 9-month period, and profit and other things is huge amount of improvement in that. This quarter, our work spanned various segments including utilities, renewables, rail, and industry.

Notable project execution include 765 kV reactors, ICTs for solar, and some of the wind substations in Gujarat and Karnataka, 132 kV GIS installation, 400 kV CRP and substation automations, etc., in that. Orders came from multiple segments, multiple industries.

Notable worth of order to be mentioning is that our modular concept is also gaining traction. As you can see here, we could get a compact mobile 400 kV substations enabling rapid deployment for a reliable power quality management in Kutch, Gujarat, for one of India's leading conglomerate.

If I move to the next slide, slide number seven. We continue to commission the projects almost in line with our customers and wherever possible.

As a technology leader, we are committed to enhancing grid reliability through timely commissioning and high-quality execution. This quarter has featured some exciting projects, again, across the cross-segments.

I'd like to highlight some of them is that 132 kV/33 kV substations in Bhutan for a leading oil and gas company. Then the commissioning of a 220 kV GIS substation for a data center in Pune in Maharashtra, and another 132 kV GIS bay extension for a major chemical company in Odisha, and then 220 kV/33 kV substation for a 300 megawatt solar project in Koppal in Karnataka in that.

In all these things, comprehensive scope including design, engineering, manufacturing, supply, erection, testing, and commissioning in that. Move to the slide eight.

At Hitachi Energy, you have been seeing this, we are committed to leading with purpose and creating a positive impact on the industry, society, and the various stakeholders with whom we interact with us. On Energy and Digital World, which is our flagship customer engagement initiative, and which we have been doing in the tier-1 cities, now we have taken to the tier-2 cities, we organized in Guwahati, where we connected nearly 150 industry leaders to discuss power automation, digital service solutions, consulting, sustainable grid technologies, and transformer technology, etc.

These discussions help us and our customers collaboratively address emerging system needs and accelerate transition to a more digital and sustainable energy ecosystems in that. We have completed 25 years in India of a power innovation in transformers as a commemorating 25 years of power transformers in India in October this year.

This include our celebrations of 25 years of power transformers. If you go to the next one is that we are very passionate about our engagement and collaboration with academia.

We are accelerating this across overall, all-India basis, deepening academia-industry collaboration through partnership with NIT Warangal, which we have extended for another five years. Through platform such as the Transtech, SHELL Changemaker, and CII ESG Summit, we continue to shape conversations around infrastructure readiness, especially on the energy security and sustainability and affordability, reinforcing the role of Hitachi Energy as a trusted partner in powering India's energy transition through that.

If I move to the slide number nine, let me give you a little bit more color on the order intake from which segments came in this quarter. As you can see here, renewable, wind and solar, data center, and industries have a strong growth Y-o-Y, and while transmission and rail and metro seen a bit of decline on this quarter, but it is important to recognize that this is a influenced by a project timings and by a strong prior performance driven by a large order during the same period of the last financial year.

Additionally, there is a year-on decline in rail and metro segment. However, we believe this is a simply a part of the market cycle and timing, and we expect it to improve in the coming quarters in that.

The order mix is also illustrated on the right-hand side. As you can see here, our products is that's where we have been driving it for several years, and our contribution from the products is much higher compared to the projects.

Utilities has been one of our major segment, but as you can see here, in this particular quarter, both utilities and the industries came almost equal in that, 47% in utilities, 43% in that. As the next two slides, I would like to hand over to my colleague, Ajay Singh, to take us through the performance on the financial front.

Over to you, Ajay.

Thank you, Venu, and good evening, everyone. I hope all of you are doing well at your end.

Let me take you through the quarter three results for our company. If you see, orders in quarter three was ₹2,477 crores.

If I compare Y-o-Y, it is negative 78%, but yeah, if I remove the HVDC order, then we are growing by 73%. Even if I compare with the last quarter, we see there is a growth of 11.7%.

Overall, a very good development on the orders. Revenues, we reached ₹2,168 crores, 29.6% growth Y-o-Y, and 13.2% growth quarter-on-quarter.

If you talk about the PBT before exceptional item, ₹402 crores is what we achieved. This is basically based on the higher revenues, focus on execution, product mix, operational efficiency, and export momentum has really contributed a good growth on the bottom line.

We are 118% more compared to the last, Y-o-Y basis. Even if I compare with the last quarter, the growth is 13.9%.

When I talk about the percentage term, PBT percentage before exceptional item, 18.5% compared to Y-o-Y 11%, and then the last quarter it was 18.4%. PBT ₹347 crores, and basically here if you see the delta of roughly ₹54 crores on account of the implementation of the new labor code that we have been, as per the guidelines, we have taken into this particular quarter, and that is why PBT is 16% for the quarter compared to the previous Y-o-Y 11% and last quarter 18.4%.

PAT 12.1%, and quarter, Y-o-Y basis, we are 8.2%. Operational EBITDA, we have reached ₹338 crores, and basically we have doubled, you can see, on Y-o-Y basis.

We are currently in this quarter 15.6% compared to on Y-o-Y basis 10.1%. Even if I compare with the previous quarter where we showed 15.2%, we are at more or less at the same level.

If I go to the next slide, a little bit more details if I give more reflection on the numbers. If you see the revenues, in the revenues, the other income is ₹61 crores.

That is basically coming that is basically coming, from the QIP, that is deposit, the interest that we are getting. That is what it has contributed.

We have a commodity exchange gain of ₹24 crores. Personnel expense, material cost if you see is around 58% compared to the last quarter, 59%, and Y-o-Y if I see, it is around 55%.

Then if you see, personnel expenses in this quarter 7.7%, other expenses 14%, depreciation and finance, 1.2% and 0.1% respectively. That is how we are we are able to close operational EBITDA before exceptional items ₹402 crores, 18.5%.

The impact of labor code, which I was discussing earlier, 54.2 is contributing roughly 2.5% for this particular quarter. That the profit after tax is at ₹261 crores, that is 12.1%.

Overall, I will summarize that fairly, good quarter in my view as far as this quarter three was concerned. Thank you, Venu.

Over to you.

Thank you, Ajay. If I move to my last slide before we open up for Q&A.

I think as we wrap up this quarter, we are happy about the progress we are making towards our two key objectives, that is sustaining our growth momentum and enhancing our efficiency across all our operations, and also improving our margins and cash, etc. We take a great pride in maintaining our leadership in core sectors like utilities, HVDC, industries, and infrastructure.

We are eager to explore and seize the new opportunities in exciting fields such as data center and BES and energy storage, etc., in that. It's a very important.

We are working towards shifting center of gravity to include more exports, service, and digital. That you're seeing how we are already trending in the right directions in that.

Also working on our strategy of expanding at the edge of the grid, that is the e-mobility, energy storage, data centers in that. Our commitment to strengthening our service business in India is unwavering.

We created the separate global BU service, including in India. We hope that the efforts of this particular team would start fetching the results over a period of time in that.

Services also help us keep continuity, which is critical to robust energy ecosystems. Many of our new age customers, such as data centers, are looking not only supplying of our technology, be it a product, system, services, but also life cycle partner.

We are dedicated to driving productivity and operational excellence under this, thereby improving our quality and expanding opportunities. We are also focused on capitalizing on our substantial order backlog to drive revenue growth and maximize the potential of capital raised for further expansions plans.

On the safety, you all know is a deeply rooted in our culture, and we are wholeheartedly committed to maintaining a robust safety-first environment not only in our factories, but also in our project sites. As we look ahead, we will continue investing in our capabilities for sustainable growth, whether through upskilling our talented workforce or expanding our operational footprint.

Together, we are paving the way for a brighter, more sustainable energy future in that. All in all, we are super excited about this market growth, market environment, and we are super impressed with the way in which we are driving sustainable energy future.

Thank you, and over to you.

Yeah. Hi, team, and congrats for very good set of results.

My first question is pertaining to execution. I just want to understand how much of execution pertaining to Mumbai HVDC project is remaining now and roughly how much of total turnover was contributed by Mumbai HVDC project for third quarter?

Yeah. Thank you, Umesh.

As you know that we don't give project-specific revenues in the quarter. When it comes to the Mumbai HVDC, we completed our work, and we just completed the pre-commissioning tests.

In a just another 2 to 3 weeks, we will commission the project.

Understood, sir. My question was largely because of our gross margin performance, which was slightly lower on a quarter-on-quarter basis.

From last quarter, it was down to now about closer to 39.5%. Apart from, say, probably increase contribution from Adani HVDC project, was there is any particular other reason for this drop in gross margin on quarter-on-quarter basis?

All right. Actually, this gross margin fluctuation is basically on the product mix that we are operating.

We have also earlier talked about that in some quarters, depending upon the execution of the products, there could be slight changes left and right. That is only the outcome of the product mix that we operate in.

Understood. Second question is pertaining to recent inflationary pressure from commodity prices.

How you are managing these pressures? What percentage of our current existing backlog is on the account of price passed on to the customer?

We talked about also this, Umesh, previously. Most of our order backlog having a price escalation formulas built in.

We have been also telling you from the beginning that it will not impact a great to the large extent because more than I think 70% of our portfolio is having a price escalation. There will be small amount of portfolio where they need immediately within 1 or 2 months turnaround for the revenue.

Those things may not be there. Otherwise, whole portfolio is price escalation.

Understood, sir. My last question is on the outlook for domestic market.

How do you see in terms of FY '27 demand, especially coming in for transformers, especially in the domestic market, in terms of capacity which is kind of also coming into the market, whether we will have same kind of pricing power in upcoming tenders? Any insight about these things?

Yeah. I think we can give a market trend.

The market is, in my view, very strong. It is still stronger, both in terms of transmission and also in terms of electrification is going in a big way.

Electrification, data center will come in a huge amount of thing in that. The need for more power equipment, whether it's a transformer, switchgear, etc., is definitely going to be there in that.

We have been looking at that capacity is coming in. Various companies have announced their capacity expansion.

Considering the existing capacities plus capacities to come, we believe that still there is a gap to close on that. This is the way.

The energy transition story, in our view, purely in my view, is a multi-year growth story. Thank you.

Thank you. Thank you so much.

All the very best.

Thank you very much for the opportunity, sir. My first question is on our HVDC localization.

I know you have highlighted in the past about we are making HVDC transformers, converter valves, and doing the entire engineering of those projects in India. I want to understand whether we are increasing our HVDC localization further or we have already reached a stage wherein further value addition is not possible at the moment in India.

We won't say that further value addition is not come. We are continuously taking a lot of actions to further increase our value addition.

Right? We have been doing that.

We are also executing the HVDC project in Marinus Link, for example, in Australia. All these things will help us to further localize the supply chains here.

Understood, sir. Secondly, could you please provide an update on the budgeted CapEx for FY '26—

Is this better?

Thank you. Sir, could you please provide an update on the budgeted CapEx for FY '26 and how much of that we have already incurred, as well as if you can highlight your CapEx plan for FY '27 and FY '28, that will be very helpful.

No, we have very clearly given in our QIP document how we wanted to utilize that. In this year, first year, we said we'll do ₹700-plus crores, and the next year will be an additional ₹700-plus crores.

That is what is the thing in that. There could be movement of few hundred crores this way, that way, but otherwise, we are on track very much.

Understood, sir. Thank you very much for answering my questions.

I'll come back in the queue.

Hi, Venu, and congratulations on a great quarter, sir. My first question is on the CapEx.

If I see the utilizations of the proceeds, we have only used ₹155 crores till now versus ₹700 crores which was envisaged for FY '26. Why there is a big disconnect between what's the CapEx incurred and what we have outlined in the document?

Just now I think we answered the same question. We have a slow start for sure, but we have a pipeline in place where, in the coming quarters it will pick up.

Because you the product cycle our product demands we cannot do a bulk CapEx at one go. We have to go in a sequential approach.

We have a plan around that, and we are hopeful that we'll pick up, all of So it might happen that right now your utilization is a lower side. Maybe the next quarter, the coming quarter, you'll see there is a huge spike also.

That is how the cycle, will operate. We are very much on to that, and we are very closely monitoring the usage of that CapEx.

Okay. My other question is on the order backlog.

We have almost ₹30,000 crores of order backlog, and if I guestimate or remove the HVDC part, our base orders will be somewhere around ₹10,000 to ₹11,000 crores. Now the Adani HVDC order is over, in the coming quarters, before the HVDC starts getting executed from FY '27, there could be slowdown in execution in the coming quarter, at least for two, three quarters now?

No, I think we told also it is not that HVDC will slow down because HVDC, for example, we are already working on the existing two projects, right? Manufacturing is going on and also various other simulations are going on.

Those are the projects we recognize the revenue based on the POC. Revenues will keep coming in that.

We don't see any slowdown in our revenue growth.

Okay. Just last one question on the other expenses.

We have been seeing reduction in other expenses despite increase in the turnover. Just wanted to understand, have we reduced any royalties?

How is this that the other expenses have been going down for the last two, three quarters?

We have been discussing earlier also that our other expenses normally hovers in the range of, let's say, 15% to 19%, right? Depending upon, a, the revenue growth and also on the operational efficiency that we have been focusing.

There we are able to get the leverage out of that. This operational efficiency, we are talking about some of the expenses also on the group expenses.

There we are working, and that is how the outcome is there. It will be in that corridor.

If you ask me ballpark number, it will be in that corridor only.

We are now migrated to our own IT system because earlier we were paying them some royalty for that, is it because of that that we are seeing some reduction?

That we have closed this chapter a year before. Right now we are totally operating on a stand-alone basis.

We are not relying on ABB basis. It is our Hitachi Energy operating system, and we are working on SAP S/4HANA the system is there.

We are on our own.

Thank you.

Good evening and my compliments on a fairly strong set of numbers. My first question is a couple of large HVDC LCC projects are there in the pipeline, which could mature over the next 12 to 18 months.

Could you speak about them and capacity-wise how are you geared to address the opportunity and if you could spell out what opportunity these two projects present roughly in terms of size as well? That's my first question.

Thank you, Sumit, for your question. I think as there are quite a lot of HVDC pipeline, but one of them has definitely come for bidding for our customers, that is the TBCB customers, is the Barmer project, which is a 6,000 megawatt LCC project.

As we said, in fact, in the last con-call also, I've been saying consistently that we have been creating the capacities in anticipation of all that. We do not have any limitation on taking any particular order, but every order we look into based on the risk-reward profile and also our exposure, etc., any particular customer.

There are very other, like any other organization look into that. We do those kind of thing, but on the pure play capacity standpoint, we do have a capacity.

We will be bidding these projects.

Just a follow-up to this, is it fair to say that the size of the HVDC opportunity addressable by you would be roughly 50% of the project cost?

We don't know, Sumit, to tell you differently. Depending upon how the line size and other things, it'll be different in that.

Yeah. It is definitely sizeable.

Sure. Sir, if you could speak about the share of exports and services in 9-month inflows and backlog and the outlook for the next 1 to 2 years for exports and services?

We said exports will be in the range of around 25% is what we set ourselves target, but now we have reached almost close to anywhere between 29%-30% range in that. It is and we also said our main thing would be to address the domestic market, and that's the reason we are expanding, we are creating the new facilities because we have a clear visibility of the domestic market where it is going to go.

We going to work. At the same time, our exports also are growing, but exports are not at the cost of the domestic market.

Services?

Thank you.

Hi, sir. If you can provide some insights on recent budget also, there has been potentially given for seven high-speed rail.

On the export opportunity also, again, one point to address is currency has depreciated. We will be more competitive advantage-wise also on the better manufacturing cost.

Don't you think that relatively export opportunity should increase for us further?

Yeah. No.

Thank you, Bala, for this questions. I think on the budget, I think in addition to what you talked about, there are many other positive things are there.

If I only restrict to the seven corridors of high-speed rail is definitely a big opportunity for Hitachi Energy. Not sure what kind of fundings, etc.

If happens to be a Japanese funding, then we're going to be in a much more sweet spot on that. Leave alone the funding, I think this is an opportunity.

In fact, again, considering this opportunities, we have already started expanding our traction transformer facility. We are expanding our traction transformer, and this will a lot of other equipment which go into that are also being expanded.

Yesterday, we did our ground-breaking ceremony for high-voltage products facility in Savli in Gujarat. This also a lot of these equipment will go not only into the transmission, but also into this high-speed rails, etc., in that.

You are absolutely right. Exports right now because of the currency, we can definitely take an advantage of it.

We are building a very solid and sustainable strategy. We don't want to create a strategy around a temporary phenomena of this thing.

If it's going to remain like that, probably we'll definitely do that. On a short-term basis, yes, we are reaching out to some of our global companies wherever they need, they can procure from us, it'll be competitiveness for us.

Those things we do it, but as I said, we are looking at a company at a longer-term, longer strategy, and basis which we are working on things. As you have seen, our margin evolution over a last 5 years is only one direction: improvement.

Just one last point on the exports.

Go ahead.

Can I continue?

Go ahead.

Yeah. Just one last point on exports.

Sir, as per our global analyst meet and takeaways-wise, there also our capacities are tied up till FY '30, FY '32, and we are adding capacities in India, and I think in other regions also. How is the scenario according to you on the global scale for us in that perspective that on the demand-supply gap?

Globally also it is the same situation. In fact, globally, in fact, they are adding the capacities, in fact, based on the frame agreements, etc., in that.

It is quite tight and quite challenging in those things. For whatever the capacities we have added, in fact, the need is to further addition is what we feel.

Those things are getting evolved. As we see the demand, you see, there are a lot of things are evolving.

You must understand that is not a traditional power systems. Traditional power system, we know the load growth, etc., in that.

The AI data centers, the demand is so huge and they need yesterday basis. That's what is the urgency of building up those kind of infrastructure.

That needs not only the equipment, but AI-ready data centers and their variation in their load from 100 megawatt to 250 megawatts in seconds. Seconds, not even minutes, seconds.

You have to have the power systems flexible enough to manage that kind of load centers, right? It's not only the equipment, your whole system need to be geared up, and that's what is happening in North America.

That's what we see in Europe, etc., in that. I'm very confident personally that we see that mirroring in India as well.

Okay.

Thanks, sir. Thanks very much.

Thank you.

Hi, sir. Thank you for the opportunity.

Sir, again on data center, you did highlight it about the strong prospects. Just wanted to understand in terms of addressable market you have in that space and since, as you highlighted, North America, is our export having data center orders already?

What is the proportion? Has that increased?

Is export also will be driven by data center orders globally? Just a color on that.

Yeah. I think as I said, our exports we are creating again capacities, etc., for domestic market, but we are flexible enough to address those exports in the data centers and also in industries, etc., in the nearby our regional Southeast Asia and other aspects in that.

To answer your question, yes, data centers is also one of the thing we are looking into. We have already received part of the orders from the data centers as exports, and we are also bidding for some other exports for data centers.

Sir,

what's the addressable market there?

No, I think we will not be bidding everything together from here. We will be complementing with our global organization wherever they are bidding it.

Suppose there's a requirement for couple of hundred transformer, they will also source couple of 10 transformers from our side in that. We will not able to estimate exactly what is the addressable market in those areas.

Right,

sir. What's the contribution from data center currently?

No, contribution to the data center on a overall our order inflow still as a single digit, high single digit.

This we are expecting to grow much faster probably?

Yes. Yes.

Yes.

Thank you, sir. Thank you so much.

Thank you.

Sir, just one question. This news, if you can help us understand regarding this Chinese thing which has been going on, the transformer side, your views on that.

Thank you, Parikshit. I think we have also read the news, and we have not seen any government clarification or official message on that.

What we heard during our interactions that they don't allow any imports from neighboring countries, okay, border countries. If they may in case if they have any manufacturing facility here, they may allow.

For us, it's not about which competition is that, as long as the level playing field is there, we do not have any issue in that. We don't see that as a major threat.

If we are not due to that, we are not holding any of our expansion plans, etc., in that. We are very, very confident that as long as the level playing field is there, we can beat the competition.

Second question is, sir, on the HVDC order, I understand that we have a level of localization in India and then there'll be imports from the parent entities. When you calculate royalty, how does it work?

Does the imports are excluded from that or the royalties will be applicable on entire revenue? How does it work on the accounting side?

Basically royalty is generally calculated based on the overall revenue. If there is any intercompany thing, that generally gets excluded.

Okay. In these two HVDC—

Royalty is paid for the technology, not as a localization of import. Royalty is because we are getting the technology, and the technology we are allowed to localize that.

For that you need to pay the royalty. Once you localize it, it is not that Every time they get an update, there will be some addition to the technology.

Those things continue to do that, no? Royalty is absolutely required.

For example, because we are paying the royalty, that's why our SF6-free technology, which is available in the world, we are able to bring it here and sell it to our customer in India to PGCIL as a thing in that. That's a big advantage.

Sir,

just wanted to clarify whether this entire HVDC orders, will royalty be paid on that or import content will be excluded? Just that clarification I need.

We will not give you exactly like that, Parikshit, but there will be some calculation, methodology, etc., what is excluded, what is not excluded in that. It'll be I'll give you some percentage on a ballpark on an overall thing in that.

Okay. Sure, sir.

Thank you.

Yeah.

Yeah. Thank you for taking my question.

Sir, on the data center, we have been reading reports stating that there will be an element of HVDC content in those orders because the power requirement and the speed of transmission is very, very different and very high. Do you think that is correct?

Do we have the capability to do that in Hitachi Energy India?

Sure. I think as I said, the data centers are evolving.

What kind of data center being built in US is completely different from the data center being built here itself. That's what I said, the 90% of the AI-ready data centers are located in those two countries, and I'm sure those data centers once start coming up here, we will also look at it.

Yes, absolutely. Today the data centers are having a big challenge in getting the not only the reliable and affordable and clean power, but also ensuring that managing the flexibility of that.

There are the data centers who are looking at connecting directly to HVDC through any other renewable source in that. From the competency standpoint, we do have those things in Hitachi Energy in India to do those kind of things as and when it is required and wherever it is required.

Sure. Secondly, sir, the recent EU deal, whenever it gets finally signed, being a European company as well, do you think that can have some impact on our export strategy in the years ahead?

Yes. That's what I said.

Definitely we will look at using our factories in India to the benefit of our own companies in Europe because of this tariff difference in that. That there will be some tweaking we'll do, or at least we really look into it, how this will pan out and what are the products we supply from here to Europe, those are the things.

Thanks a lot, sir. Thanks a lot.

Hi. Thanks for the opportunity.

I just wanted to understand a bit more on the export strategy. Is there any thoughts on the parent allocating greater markets to the Indian entity, given the global shortages?

Is there scope for the Indian entity to serve more export requirements of the parent?

Thank you, Shirom. I think our export strategy is very robust, and we have been building over a period of time.

We have a three-pronged strategy. The first one is that we do have certain global feeder factories, and those products we only manufacture here, and we sell all over the world.

Then we have some allocated markets, and these allocated markets being reviewed to add a little bit more wherever it is makes sense for us. Then we develop these allocated markets just like any other market, together with the local sales organization of that particular country.

Then we start amalgamating our factories and start selling those things in that. This is accelerating as we speak, and we are getting more and more markets to do that.

The third one is we do have a feeder factories where we manufacture the components for the bigger product, and this component we sell it to our own factories around the world. The combination of these three, what we are saying is it will be 25% to 30% of our orders going forward.

That excluding, of course, to take out the big HVDC project, then it will be 25% to 30%.

Understood, sir. Thank you so much.

All the best.

Okay.

Good evening, and thank you for the opportunity. Just wanted to get a clarification on one point.

I'm trying to connect two things. First, you have mentioned in the past that, starting 4Q of FY '26, you're firmly going to be entering double-digit margins.

I think we've already done that two quarters early. Margins are already quite strong.

At the same time, we are seeing the Adani HVDC project, which has gotten delayed for some time, now entering into the commissioning stage. Is there a chance that we could see some delay-related penalty or LD-related hits that could come in 4Q?

Or are you confident of maintaining these levels of margins and only improving from here on?

We don't have any delay in HVDC on account of us, on LD or anything in that. That's very clear, and we don't see that as a thing in that.

As I said, now we have been building on a long-term basis, and you have seen in the last not three quarters, but several quarters what we are saying and what we are doing it. It's very consistently we are bringing the margins up.

Perfect, sir. Thank you so much.

That clarifies my question.

Okay. Operator, if don't have any questions, so that we almost came to the last minutes.

Right. Once again, thank you very much for your participation and your engagement.

If you need any further information, please do reach out to us. We are happy to engage with you and provide any additional information, etc., in that.

We are in a such a era of sustainable energy future. We are super excited about the opportunities arising not only out of our traditional segment, but also the new segments.

I'm sure, like us, you are also super excited about what we are doing it. Thank you for joining, and looking forward to seeing you or meeting you or talking to you soon.

Thank you very much. Have a great day.