GE Power India Bets on Services-Led Growth as Power Sector Balances Thermal Reliability and Energy Transition

GE Power India Bets on Services-Led Growth as Power Sector Balances Thermal Reliability and Energy Transition

The Electrical Post

GE Power India Limited (GEPIL) sees significant opportunities emerging from India's evolving power sector as the country pursues a balanced energy strategy focused on reliable baseload generation alongside the expansion of renewable energy. During its investor interaction for the quarter ended December 2025, the company highlighted improving market fundamentals, strong operational performance and a strategic shift toward higher-margin services businesses that is driving profitability and strengthening its long-term outlook.

According to Managing Director Puneet Bhatla, India's macroeconomic environment remains supportive for infrastructure and energy investments. The Economic Survey projects GDP growth of around 7.4% in 2026, supported by improving rural consumption, industrial activity and continued government capital expenditure. Inflation moderation and supportive monetary conditions are also expected to create a favorable environment for investments across the power value chain. He noted that the government's policy direction continues to support a balanced energy mix, ensuring reliable thermal power generation while progressively scaling renewable and cleaner technologies.

The Indian power market is currently witnessing important regulatory developments. The Ministry of Environment, Forest and Climate Change has revised timelines for Flue Gas Desulphurization (FGD) installations across thermal power stations, while also excluding around 70 GW of Category C plants from the compliance framework. These developments have created uncertainty in the FGD market, with project ordering remaining slow and some previously awarded contracts facing termination. GEPIL stated that it is closely monitoring how the revised policy framework influences future order activity in the emissions control segment.

Against this backdrop, GE Power India has increasingly focused on services, upgrades and modernization opportunities rather than large, long-gestation engineering projects. The company believes India's installed thermal power base presents a sizeable addressable market estimated at around Rs. 2,500 crore, covering both GE and non-GE assets. Notably, more than half of the company's recent core service orders originated from non-GE assets, indicating growing acceptance of its expertise across a broader customer base.

The company reported that its interventions during the first nine months of FY26 supported nearly 14 GW of power generation assets, reinforcing its role in maintaining reliable and affordable electricity supply while assisting utilities in their energy transition efforts. Management emphasized that improving plant efficiency, upgrades, maintenance services and operational support are becoming increasingly important as India seeks to maximize the performance of existing thermal generation assets.

Financially, GEPIL delivered a strong performance during the quarter ended December 2025. Revenue increased 22% year-on-year to Rs. 386 crore from Rs. 317 crore in the corresponding quarter of the previous year, driven primarily by growth in the core services business. Profit before tax and exceptional items from continuing operations rose sharply to Rs. 131 crore compared with Rs. 23 crore a year earlier, reflecting substantial improvement in operational performance and profitability.

The company's strategic transformation, initiated several quarters ago, continues to generate results. Management highlighted its deliberate move toward high-margin, shorter cash-cycle and lower working-capital-intensive opportunities while gradually reducing exposure to large, long-duration projects. This approach has contributed to stronger margins, better cash flows and improved business stability. Core service orders increased 21% year-on-year, while revenues also recorded steady growth.

As of December 31, 2025, GEPIL's order backlog stood at approximately Rs. 1,671 crore, providing visibility for nearly two years of execution from continuing operations. While the backlog declined from Rs. 2,662 crore reported at the end of FY25, the reduction was primarily attributed to the termination of two FGD engineering procurement contracts at Jaypee Bina and Nigrie, collectively valued at around Rs. 775 crore.

The company also made progress in strengthening its balance sheet through settlement and collection of legacy receivables. Management disclosed that structured settlements with major customers, including BHEL and Jaypee, have advanced significantly. During the financial year, GEPIL received Rs. 216 crore from BHEL under a settlement agreement and concluded a full and final settlement with Jaypee, resulting in additional cash inflows and reduced financial exposure.

Another strategic milestone has been the demerger of the Durgapur facility to JSW Energy, effective July 2025. According to management, the transaction will streamline the portfolio, lower fixed-cost exposure and strengthen the company's focus on asset-light and service-led business opportunities while maintaining support for customers through commercial arrangements.

Looking ahead, Managing Director Puneet Bhatla expressed confidence in the company's trajectory. He stated that GEPIL is entering the final phase of FY26 with a sharper focus on financial discipline, operational excellence and margin expansion. With a focused portfolio, improving profitability and a healthy order book, the company believes it is well positioned to capitalize on opportunities arising from India's growing power sector. He reiterated that the strategy remains centered on servicing the country's large installed thermal power base, pursuing higher-margin opportunities and maintaining disciplined execution.

Management also indicated that GEPIL aims to sustain double-digit EBITDA margins over the medium term through continued expansion of its core services business. While opportunities in areas such as nuclear power are not currently part of the company's strategy, the focus remains firmly on maintenance, upgrades, plant flexibility solutions and operational services for thermal assets. As India's electricity demand continues to rise and the grid increasingly requires flexible and reliable generation, GEPIL expects its services-led model to remain a key growth driver in the years ahead.
 

Published at : Sep 06, 2026 06:50 AM (IST)

Total Views : 66