Stocks to Buy Today: On 9 November 2023, the financial services firm ICICI Securities published the latest research report on GE T&D India shares, assigning a ‘buy’ rating to the stock. The comprehensive analysis also provides valuable insights into the company’s financial health.
ICICI Securities is Bullish on GE T&D India and has recommended a ‘buy’ rating on the stock with a target price of Rs 460. Let’s take a closer look at their recommendations for the GE T&D India share price target set by ICICI Securities.
GE T&D India has reported a significant improvement in its operating profit margin, reaching 8.7% — an increase of 161 basis points sequentially and a notable 791 basis points year-on-year. This marks the highest operating margin the company has achieved in the last 18 quarters. However, revenue remained constant compared to the previous year and saw a slight decrease of 3% sequentially, totaling INR 7 billion.
The company experienced a robust order inflow for the quarter, amounting to INR 11 billion, reflecting a 121% increase year-on-year. Consequently, the order book escalated to INR 43 billion, with a book-to-bill ratio of 1.5 times. This is expected to further benefit from the Indian government’s INR 2.4 trillion grid upgrade plan, which should intensify transmission activities in the upcoming quarters. Despite this, there have been delays in transmission bidding activities, prompting a reduction in the FY25 estimates and the introduction of FY26 estimates.
The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) soared by 1,015% year-on-year to INR 606 million, and net profit also surged by 433% year-on-year to INR 372 million. Moreover, GE T&D India has significantly reduced its net debt from INR 1.2 billion to INR 114 million at the end of the quarter.
The outlook for transmission capital expenditure is optimistic, with a substantial increase expected due to the demand for infrastructure capable of supporting renewable energy sources. The government’s INR 2.4 trillion initiative for upgrading the grid and the INR 1.8 trillion worth of projects already approved indicate a promising future for the sector. GE T&D India, with its expertise in supplying HVDC projects and prospects in the distribution of SCADA products due to new discom reforms, is well-positioned to capitalize on these opportunities.
The stock maintains a ‘BUY’ rating with a revised target price of INR 460 per share, which is based on a 40 times multiple of the forecasted FY26 earnings per share (EPS).
- Promoters: Their ownership percentage has remained constant at 75.0% across all three quarters.
- Institutional investors: There was a slight increase from 16.0% in March to 16.9% in June, followed by a minor decrease to 16.8% in September.
- MFs and others: Ownership increased from 14.5% in March to 15.4% in June, then slightly decreased to 15.2% in September.
- FIs/Banks: There is no stake recorded in this category for any of the quarters.
- Insurance: The stake decreased from 1.2% in March to 1.0% in June, then further to 0.8% in September.
- FIIs: There has been a consistent increase from 0.3% in March to 0.6% in June and finally to 0.8% in September.
- Others: Their shareholding decreased slightly from 9.0% in March to 8.1% in June, then marginally increased to 8.2% in September.
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