India Clean Energy Transition To Drive Multi Decade Rise in Transmission

18 April 2024 | 3:06AM IST
India Clean Energy
Transition to drive multi-decade rise in transmission

capex; initiate Power Grid, Hitachi (Buy), Schneider (Sell)
Power transmission is key to India’s energy transition and global new energy cost Apoorva Bahadur
+91(22)6616-9325 |
leadership ambitions. India’s large, highly integrated grid enables the utilisation of apoorva.bahadur@gs.com
Goldman Sachs India SPL
least-cost renewable generation sites, and by keeping the central grid access free,
Nikhil Bhandari
the government is assisting the viability of renewable projects via indirect +65-6889-2867 | nikhil.bhandari@gs.com
Goldman Sachs (Singapore) Pte
financial support worth US$270bn. Creating surplus transmission infrastructure
and keeping it free for renewables makes economic sense, in our view, as the gains
from transition should more than offset the incremental network cost. In line with
this, we estimate India’s power transmission capex requirement at US$500bn+
by FY50E, c.30% of the overall energy transition capital outlay.
We initiate on Power Grid (PGRD.BO) at Buy (12-m TP of Rs355; 29% upside).

We view Power Grid as the largest beneficiary of our transition-linked grid capex
estimate, which think the stock is not fully pricing in. Additionally, with Power Grid’s
large balance sheet, low cost of debt and strong annual FCF generation, we
estimate it could fund c.30% of India’s grid capex by FY32E without reducing
For the exclusive use of
dividend payouts. We also think a cost of equity reduction led by beta compression
could be another catalyst for stock re-rating.
We initiate on Hitachi Energy India (HITN.BO) at Buy (Rs8,250; 9% upside). We

like its positioning as a pure upstream manufacturing beneficiary of India’s energy
transition, with tech leadership in high voltage equipment and highly indigenized
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manufacturing capabilities. It should also benefit from tailwinds of: grid digitalization,
global transmission equipment shortage, global supply chain diversification theme.
We initiate on Schneider Electric Infra (SEIN.BO) at Sell (Rs470; 41% downside).

While we see Schneider as a potential beneficiary of the expected rise in distribution
capex, increase in energy efficiency-linked spend and broader digitalisation and
global supply chain diversification trends, risk-reward appears unfavorable post a
375% rally in the share price over the last 12 months. Shares appear to be pricing in
c.8% terminal growth beyond the 18% core earnings CAGR we expect in FY23-40E.
Key risks: Delayed/slower-than-expected pick-up in transmission project awards, rise

in competitive intensity/cost of debt hampering TBCB project IRRs and shortage of
transmission equipment hampering project execution.
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investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this
report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC
certification and other important disclosures, see the Disclosure Appendix, or go to
www.gs.com/research/hedge.html. Analysts employed by non-US affiliates are not registered/qualified as research
analysts with FINRA in the U.S.
Goldman Sachs India Clean Energy
Table of Contents
Valuation framework and GS vs. consensus 3
Power Grid (PGRD.BO): Direct beneficiary of our transmission for transition thesis; initiate at Buy 7
Hitachi Energy India (HITN.BO): Upstream manufacturing beneficiary of India’s energy transition; initiate at
Buy 21
Schneider Electric Infrastructure Ltd. (SEIN.BO): Potential beneficiary of distribution capex expansion and
energy efficiency drive, but unfavorable risk-reward; initiate at Sell 39
Investment theses, price targets, risks and methodologies 53
Disclosure Appendix 55
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18 April 2024 2
Valuation framework and GS vs. consensus
We use different valuation approaches for our coverage given the significant differences
in business models and risk-return profiles of traditional cost plus and competitively won
transmission assets and that of transmission and distribution (T&D) equipment
manufacturers. Given the steady return profile of regulated businesses, we value them
using P/BV on FY26E regulated equity and core RoE estimates. For competitively won
transmission assets, we build long-term cashflows based on levelised bid and capital
cost estimates. Lastly, for T&D equipment suppliers, we utilise our India Transition TAM
model to forecast annual order inflows, which we use to estimate 15-25 year FCFE.
Exhibit 1: Valuation framework

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Source: Goldman Sachs Global Investment Research
18 April 2024 3
Exhibit 2: Coverage earnings summary vs. consensus

(Rs mn) GSe Consensus Divergence (%)
Company FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Power Grid
Revenue 449,949 453,522 478,494 464,838 496,489 518,540 (3.2) (8.7) (7.7)
EBITDA 392,838 393,365 414,041 408,901 427,096 441,020 (3.9) (7.9) (6.1)
PAT 150,649 155,811 165,675 159,129 166,874 177,182 (5.3) (6.6) (6.5)
Hitachi Energy
India
Revenue 50,228 71,729 103,221 51,089 67,429 N/A (1.7) 6.4 N/A
EBITDA 2,921 6,342 11,058 2,858 5,966 N/A 2.2 6.3 N/A
PAT 1,213 3,219 5,863 1,185 3,597 N/A 2.4 (10.5) N/A
Schneider
Electric Infra
Revenue 22,591 26,334 33,748 22,360 26,752 31,262 1.0 (1.6) 8.0
EBITDA 2,937 3,601 5,028 2,862 3,424 4,095 2.6 5.2 22.8
PAT 2,248 2,167 3,172 2,219 2,682 3,339 1.3 (19.2) (5.0)
Note: Power Grid estimates are for consolidated accounts; consensus data as of April 11, 2024.
Source: Bloomberg, Goldman Sachs Global Investment Research
Exhibit 3: Coverage rating and valuation summary

Implied FY26E
12m TP Upside /
Company Rating CMP (Rs/sh) target multiple - Valuation methodology
(Rs/sh) downside (%)
P/BV / P/E
LT DCF derived P/BV for regulated
Power Grid Buy 274 355 29.4 3.2
business, 35yr NPV for TBCB assets
DCF based on TAM forecast with 5%
Hitachi Energy India Buy 7,564 8,250 9.1 60
terminal growth
DCF based on TAM forecast with 5%
Schneider Electric Infra Sell 794 470 (40.8) 35
terminal growth
*priced as on 16th Apr’24.
Source: Datastream, Goldman Sachs Global Investment Research
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18 April 2024 4
Exhibit 4: Valuation Comparison - Power Grid trades at a discount to Indian power companies
Market Cap Price (LC) Target Up/Downside P/E (x) EV/EBITDA (x) P/B (x) ROE (%)
Company Rating Curr.
($ bn) Apr 16 Price (%) FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Coverage
NTPC* Buy 41.7 359.25 INR 395.00 10.0 18.0 15.9 13.8 11.9 10.8 9.7 2.2 2.0 1.9 12.7 13.3 14.0
Powergrid Buy 30.5 274.35 INR 355.00 32.8 16.9 16.4 15.4 9.5 9.5 9.4 2.9 2.7 2.4 17.5 16.8 16.5
SJVN Sell 6.0 127.40 INR 72.50 -43.1 45.8 44.9 23.8 34.6 30.4 13.8 3.5 3.3 3.0 7.7 7.5 13.0
Tata Power Sell 15.5 430.35 INR 240.00 -44.2 52.6 33.7 33.1 18.1 14.3 13.6 4.2 3.8 3.4 8.3 11.8 10.9
Median 31.9 25.0 19.6 15.0 12.6 11.6 3.2 3.0 2.7 10.5 12.6 13.5
India RE & Utilities

JSW Energy NC 12.6 601.40 INR N/A N/A 57.2 39.4 31.5 22.0 16.6 13.6 5.0 4.5 4.0 8.9 11.5 13.9
CESC NC 2.2 141.10 INR N/A N/A 13.0 11.9 10.7 9.2 7.9 7.2 1.6 1.5 1.4 12.4 12.5 11.9
NHPC NC 11.0 91.17 INR N/A N/A 24.5 20.2 16.3 22.6 16.0 12.4 2.4 2.2 2.1 11.0 11.5 12.7
Torrent Power NC 8.7 1505.70 INR N/A N/A 36.7 26.7 24.6 17.4 14.2 13.2 5.7 5.0 4.4 20.2 19.5 18.6
Median 30.6 23.4 20.4 19.7 15.1 12.8 3.7 3.4 3.1
4.0
India RE & Utilities Median 30.6 23.4 20.1 17.7 14.3 12.8 3.2 3.0 2.7 11.7 12.1 13.5
European RE & Utilities

Edp Renovaveis Buy 14.8 12.83 EUR 17.50 36.4 41.1 50.5 28.4 15.4 14.5 12.2 1.2 1.2 1.1 2.9 2.4 4.0
Edp-Energias De Portugal Buy 16.0 3.60 EUR 4.40 22.2 11.4 13.9 14.5 9.6 9.9 9.9 0.9 0.9 0.9 8.5 6.4 6.0
Enel Spa Buy 62.6 5.79 EUR 8.65 49.3 9.1 8.5 8.6 6.4 6.0 6.0 1.9 1.7 1.6 14.9 14.8 13.6
Solaria Energia Neutral 1.3 9.76 EUR 12.50 28.1 11.3 14.4 11.2 14.6 12.7 10.8 2.3 2.0 1.7 24.7 14.9 16.4
Rwe Ag Buy 25.2 31.90 EUR 47.00 47.3 5.0 12.4 16.4 5.2 8.4 9.7 0.7 0.7 0.7 14.5 5.7 4.2
Orsted A/S Buy 23.0 383.40 DKK 505.00 31.7 20.0 18.6 16.5 14.5 8.5 7.9 2.1 1.9 1.7 9.3 10.6 10.8
Acciona Energia Sell 7.0 19.95 EUR 20.00 0.3 14.0 26.2 25.6 11.1 10.2 9.9 1.1 1.1 1.1 7.4 3.9 4.0
Iberdrola Buy 76.0 11.13 EUR 14.00 25.8 15.2 14.2 13.0 9.6 9.2 8.8 1.7 1.6 1.5 7.9 8.3 8.8
Elia Group Buy 7.2 92.30 EUR 135.00 46.3 20.9 18.2 17.3 14.1 13.3 13.6 1.3 1.3 1.2 5.8 6.6 6.7
Endesa Neutral 19.3 17.17 EUR 19.75 15.1 13.3 11.0 10.7 7.7 6.1 5.9 3.3 2.6 2.4 24.2 25.4 22.7
E.On* Buy 33.9 12.08 EUR 16.50 36.6 10.4 10.7 10.9 8.7 9.0 9.1 2.3 2.0 1.8 12.0 12.9 12.9
Terna Neutral 15.5 7.26 EUR 7.95 9.5 16.5 13.8 14.0 11.8 10.5 10.8 2.3 2.2 2.1 14.1 16.1 15.2
Median 13.7 14.0 14.3 10.4 9.5 9.8 1.8 1.7 1.6 10.6 9.4 9.8
US RE & Utilities
Nextera Energy Partners Lp CS 2.5 27.00 USD N/A N/A 13.7 12.0 14.8 9.5 9.2 9.2 0.9 1.4 N/A NA NA NA
Brookfield Renewable Partner NC 13.2 20.01 USD N/A N/A 19.6 15.5 12.4 28.8 26.1 27.8 1.0 0.8 N/A NA NA NA
American Electric Power Buy 41.0 79.51 USD 99.00 24.5 15.2 14.1 13.0 11.9 10.8 10.5 1.6 1.6 1.5 11.0 11.5 11.8
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Nextera Energy Inc Buy 123.7 61.70 USD 73.00 18.3 19.4 18.5 16.7 13.9 13.7 12.0 2.1 2.1 1.9 11.9 11.3 11.9
Duke Energy Corp Neutral 71.5 92.87 USD 100.00 7.7 16.7 15.8 14.9 11.5 10.6 10.2 1.5 1.5 1.4 8.4 8.9 9.2
Xcel Energy Inc Buy 28.6 52.53 USD 71.00 35.2 15.7 14.6 13.4 12.5 10.4 10.3 1.7 1.5 1.5 10.8 11.1 11.3
Median 16.2 15.1 14.1 12.2 10.7 10.4 1.6 1.5 1.5 10.9 11.2 11.6
Global RE & Utilities Median 15.2 14.3 14.3 11.6 10.3 10.0 1.6 1.6 1.5 10.9 10.8 11.0
* denotes stock is on the Conviction List; closing price on April 16, 2024
Source: Datastream, Bloomberg, Goldman Sachs Global Investment Research, Company data
18 April 2024 5
Exhibit 5: Valuation Comparison - India MNC industrials trade at a significant premium to their global parents
Market Cap Price (LC) Target Up/Downside P/E (x) EV/EBITDA (x) P/B (x) RoE (%)
Company Rating Curr.
($ bn) Apr 16 Price (%) FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Coverage
Hitachi Energy India Buy 2.9 7,564.45 INR 8,250.00 9.1 264.2 99.6 54.7 110.6 51.6 30.1 24.3 20.2 15.6 9.6 22.1 32.1
Schneider Electric Infra Sell 1.2 794.15 INR 470.00 -40.8 80.4 83.4 57.0 63.2 51.5 36.9 48.1 31.7 21.5 85.3 45.8 45.0
Coverage Median 172.3 91.5 55.8 86.9 51.6 33.5 36.2 25.9 18.5 47.4 34.0 38.5
India MNC Industrials

ABB India NC 12.3 818.60 INR N/A N/A 84.5 73.5 64.7 68.2 58.2 50.0 17.2 14.4 12.1 21.9 26.1 31.3
Siemens India NC 17.5 5,532.55 INR N/A N/A 66.6 55.2 45.5 48.9 40.0 32.5 9.9 8.7 7.8 15.1 15.9 17.0
Cummins India Neutral 10.4 3,121.65 INR 1,737.00 -44.4 70.5 56.6 54.0 33.1 57.3 53.9 15.0 13.1 11.7 22.5 24.7 22.9
Median 70.5 56.6 54.0 48.9 57.3 50.0 15.0 13.1 11.7 21.9 24.7 22.9
Japan Industrial Electronics

Hitachi* Buy 86.8 13,880.00 JPY 16,700.00 20.3 20.0 23.2 20.6 7.3 11.3 10.4 2.6 2.9 2.6 12.1 11.1 12.1
Fujikura Buy 4.7 2,613.00 JPY 2,700.00 3.3 17.6 16.0 13.0 4.1 8.8 7.4 3.1 2.6 2.3 15.2 15.2 17.4
Panasonic HD Neutral 20.5 1,359.50 JPY 1,650.00 21.4 12.0 7.8 11.8 5.6 5.0 4.8 0.9 0.8 0.8 7.4 10.3 6.4
Fuji Electric Buy 9.2 9,918.00 JPY 11,600.00 17.0 23.1 19.1 17.4 6.4 9.7 8.4 2.7 2.5 2.2 11.2 12.5 12.5
Daihen Buy 1.6 9,960.00 JPY 10,600.00 6.4 18.5 15.1 15.4 6.7 12.7 9.6 2.4 2.1 1.9 12.9 14.3 12.6
Sumitomo Elec. Neutral 12.0 2,388.00 JPY 2,600.00 8.9 16.5 14.3 12.1 5.0 6.2 5.7 1.0 1.0 1.0 5.4 6.3 7.3
Furukawa Sell 1.5 3,367.00 JPY 2,900.00 -13.9 14.9 38.3 20.9 9.6 11.8 8.8 0.8 0.8 0.8 4.9 1.9 3.4
Meidensha Sell 0.9 3,200.00 JPY 2,600.00 -18.8 20.4 20.7 17.1 6.0 8.0 7.1 1.3 1.3 1.2 6.4 6.0 7.0
Median 18.1 17.5 16.2 6.2 9.3 7.9 1.9 1.7 1.6 9.3 10.7 9.7
European Industrials
ABB Buy 97.7 41.45 CHF 44.00 6.2 17.8 18.5 16.4 12.2 14.2 12.7 5.7 5.4 5.0 31.5 28.5 30.1
Siemens AG Buy 145.5 173.08 EUR 220.00 27.1 15.9 16.0 13.9 8.9 10.3 8.6 2.9 2.8 2.6 14.7 14.8 16.3
Schneider Electric Sell 123.4 208.70 EUR 167.00 -20.0 25.4 24.1 21.8 12.1 14.9 13.5 4.4 4.1 3.9 17.3 17.3 17.8
Rexel S.A. Buy 7.6 23.82 EUR 29.00 21.7 9.3 9.2 8.4 5.9 6.9 6.4 1.3 1.2 1.1 14.3 13.6 13.8
Median 16.8 17.2 15.2 10.5 12.2 10.7 3.6 3.5 3.2 16.0 16.0 17.0
US Industrials
Cummins Inc. Neutral 42.1 294.58 USD 306.00 N/A 14.9 15.2 14.5 6.9 8.9 8.6 4.7 6.1 5.3 27.9 30.4 33.6
Generac Holdings Buy 7.9 129.10 USD 123.00 -4.7 31.2 29.7 25.5 14.4 14.6 12.5 3.5 3.1 2.8 10.9 11.1 11.4
Median 23.1 22.4 20.0 10.7 11.8 10.6 4.1 4.6 4.0 19.4 20.7 22.5
* denotes stock is on our Conviction List; as on April 16, 2024. NC = Not Covered.
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Source: Datastream, Bloomberg, Goldman Sachs Global Investment Research, Company data
18 April 2024 6
Power Grid (PGRD.BO): Direct beneficiary of our transmission for transition

thesis; initiate at Buy
Investment Thesis
US$500bn+ transmission TAM: Power Grid Corporation of India (PGCIL) stands to be
the largest beneficiary of our US$500bn+ grid TAM estimate between FY24-50E (Exhibit
7) - 1/3rd of India’s overall energy transition TAM, based on our estimates. It’s large
balance sheet, low cost of debt and strong annual free cash generation position it
favorably to capture bulk of our TAM estimate. PGCIL also benefits from being eligible
for direct nomination to execute large, complicated, multi-region projects – which, in our
opinion can see material ramp up as India focuses on cross border grid
interconnections.
Large balance sheet, low cost of debt = competitive advantage: Our analysis of
PGCIL’s cash flows implies PGCIL alone will be able to fund 30% of India’s planned grid
capex by FY32E, while maintaining its current dividend payout (Exhibit 13). PGCIL’s cost
of debt advantage is similar to that of NTPC in renewables, which has allowed PGCIL to
capture 40%+ of the auction market share. We also expect PGCIL to benefit from an
easing of competitive intensity in new project auctions as most private developers run
out of balance sheet capacity due to the sheer quantum of capex we expect grid
expansion will require.
Long-term beta not truly reflective of PGCIL’s cost of equity: We believe PGCIL’s
long-term beta of c.0.6x not only compares poorly vs. global peers’ median of 0.4x
(Exhibit 18), but also materially increases the company’s cost of equity - thereby
impacting its fair value. If we substitute our assumed beta of 0.6x with the global
median, our fair value estimate for PGCIL increases c.32% from Rs355 to Rs470. In
fact, PGCIL’s closest listed global peer, Elia Group (ELI.BR; Buy), has a long-term beta of
2a216976d69f48d9b2a05ab7ff02f49b
just 0.15x - at which our fair value estimate for PGCIL increases to Rs695. While it is
difficult to pinpoint the reason behind this discrepancy, we believe it was due to the high
earnings growth period that PGCIL seen in FY09-21 (Exhibit 19, Exhibit 20). While we do
not factor any beta reduction in our valuation, it could surprise positively.
Regulatory overhang removed; grandfathering of legacy asset base implies

long-term comfort: The 2025-29 tariff notification by CERC (Central Electricity
Regulatory Commission) reduced normative RoE of prospective transmission projects
by 50bps and left PGCIL’s large legacy asset base returns untouched. We see two
positives for PGCIL from this: 1) the bulk of its asset base growth is expected to be
auction driven, which will not be impacted by the RoE reduction; 2) more importantly,
grandfathering of the legacy projects eases concerns about future regulatory uncertainty
as it implies the central regulator realizes that a change in normative RoE would impair
project economics based on which it was originally funded.
Where are we different: 1) Our thesis that the transmission grid expansion required for
energy transition will be much larger and will continue for much longer, than
government’s current estimate of US$35bn transmission capex by FY29E (see our
18 April 2024 7
sector note for more). 2) Likely improvement in auction returns as competitive intensity
subsides with pickup in transmission capex; and 3) belief that PGCIL will be the
preferred partner for executing complicated, inter-regional and cross-border projects.
Risk-reward: Combination of steady cashflows from regulated business along with

transition led potential transmission capex revival ensures favorable risk reward for
PGCIL. Stock is trading at FY26E P/BV of 2.4x vs. 4.5x of domestic private gencos,
despite offering superior RoEs and better growth prospects, in our opinion; we believe
revival in transmission capex should more than offset this gap.
Earnings & valuation: We forecast a 2% earnings CAGR in FY23-26E, driven by c.3%

regulated equity CAGR and 20% profit CAGR of auction-won projects. We initiate
coverage with a Buy rating and a 12-month SoTP-based TP of Rs355/sh (book FY26E
P/BV of 3.2x, vs. LT avg. of c.2x) and 3% dividend yield.
Key risks: Delay / slower than expected pick up in transmission project awards, rise in
competitive intensity / cost of debt hampering TBCB project IRRs and shortage of
transmission equipment affecting project execution.
Our thesis in key charts
Exhibit 6: India Energy Transition Stack - how India is leveraging its national grid to attain energy and food self-sufficiency, achieve global
new energy cost leadership
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18 April 2024 8
Exhibit 7: ...which will lead to creation of a capex opportunity worth

US$524bn b/w FY24-50E
600
(USD bn)
500 47
92
400
300 191
524
200
100 195
-
National grid + State grid + GH2 linked grid + C&I linked grid Total grid capex
capex capex capex capex
Source: CEA, Goldman Sachs Global Investment Research
Exhibit 8: Over the next 10 years, we estimate India’s grid capex to more than double vs. previous 10 years
16 Cumulative capex in previous 10 yrs was USD51bn Cumulative capex over next 10 yrs est. to be USD111bn
14 (Total transmission capex; USD bn)
12
10
2
Source: CEA, Goldman Sachs Global Investment Research
Exhibit 9: …that should help restart Power Grid’s transmission capex cycle - which previously peaked in FY15 & sharply contracted post
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FY19
Power Grid’s annual capex and capitalisation data
450 (Rs bn) Capex Capitalisation

400
Expect the capex
High capex phase of cycle to meaningfully
350 previous cycle where restart FY25-26E
300 company undertook onwards
significant asset base
250 expansion
200
150
100
50
0
Source: Company data, Data compiled by Goldman Sachs Global Investment Research
18 April 2024 9
Exhibit 10: We expect Power Grid’s regulated gross asset base to Exhibit 11: ...which will result in 7% CAGR in regulated equited
increase at c.3% CAGR over FY24-32E... over the same period
3,700 Nnormative Gross Fixed Assets 1,400

(Rs bn) (Rs bn) Regulated Equity
3,500
1,300
1,200
3,300
1,100
3,100
1,000
2,900 900
2,700 800
700
2,500
600
FY21 FY22 FY23
FY24EFY25EFY26EFY27EFY28EFY29EFY30EFY31EFY32E
Source: Company data, CEA, Goldman Sachs Global Investment Research Source: Company data, CEA, Goldman Sachs Global Investment Research
Exhibit 12: Power Grid’s FCF generation has been positive since Exhibit 13: We estimate PGCIL’s annual cash generation to be
FY20 when capex peaked; we expect it to remain positive once the adequate to fund c.30% of India’s overall grid capex b/w FY24-32E,
next cycle restarts around FY25-26E even when maintaining its current dividend payout
300 FCF generation Dividend payment 1,350 Grid capex PGCIL's capex ability
(Rs bn) (Rs bn)
250 1,150
200 950
150 750
100 550
50 350
0 150
-50 -50
Source: Company data, Goldman Sachs Global Investment Research Source: Company data, Goldman Sachs Global Investment Research
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Exhibit 14: PGCIL’s debt cost is materially lower than private Exhibit 15: ...allowing it to capture 40%+ mkt share in auctions till
competitors... date
8.8 (%) Cost of borrowing

8.6
8.4
8.2
8.0
7.8
7.6
7.4
7.2
7.0
6.8
Power Grid Adani Transmission Indigrid
*for FY23 *data till 1HFY24
Source: Company data, Goldman Sachs Global Investment Research Source: CEA, Goldman Sachs Global Investment Research
18 April 2024 10
Exhibit 16: Power Grid’s valuations tracks transmission capex momentum; we believe it is yet to fully price in the expected capex uptick
3.5 (x) 450

1yr fwd P/BV Capitalisation - RHS Capex - RHS (Rs bn)
400
3.0 350
300
2.5
250
200
2.0
150
1.5 100
50
1.0 0
Jul-08 Jul-10 Jul-12 Jul-14 Jul-16 Jul-18 Jul-20 Jul-22 Jul-24 Jul-26 Jul-28 Jul-30
*priced as on April 16th, 2024
Source: Company data, Datastream, Goldman Sachs Global Investment Research
Exhibit 17: Rising peak deficit tide is lifting Power Grid’s boat as well
3.5 35
(x) 1yr fwd P/BV Peak deficit - RHS (GW)
30
3.0
25
2.5
20
15
2.0
10
1.5
5
1.0 0
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Jul-08 Jul-10 Jul-12 Jul-14 Jul-16 Jul-18 Jul-20 Jul-22 Jul-24 Jul-26 Jul-28 Jul-30
*priced as on April 16th, 2024
18 April 2024 11
Exhibit 18: PGCIL’s long term beta is c.55% higher than that of global peers with a similar business profile, resulting in materially higher cost
of equity even after factoring country risk profile...
till date
0.7
(long term beta; x)
0.6
0.6 0.6
0.6
0.5
0.4 0.4
0.4
0.4 0.4 0.4
0.4
0.3
0.3
0.3
0.2
0.2
0.2
0.1
0.0
Elia Eon Terna HK Electric Power FE AEP SSE ES PCG XEL Global Power Grid
Asset Median
Holding
Source: Bloomberg, Data compiled by Goldman Sachs Global Investment Research
Exhibit 19: ...which seems to be the outcome of company’s high Exhibit 20: ...and is also reflected in Beta reduction with earnings
asset base growth in FY09-21.... growth slowdown since FY21
1.0 (x) (%) 30 1.0 (x) (%) 25

Regulated equity CAGR - RHS Beta PAT CAGR - RHS Beta
0.9 0.9
0.9 25 0.9
0.8 0.8 20
0.7 0.7
20
0.6 0.6 15
0.6 0.6 0.6 0.6
0.5 0.6 15 0.5 0.6
0.4 0.4 10
10
0.3 0.3
0.3 0.3
0.2 0.2 5
2a216976d69f48d9b2a05ab7ff02f49b
5
0.1 0.1
0.0 0 0.0 0
FY09-12 FY12-15 FY15-18 FY18-21 FY21-24E FY09-12 FY12-15 FY15-18 FY18-21 FY21-24E
Source: Bloomberg, Company data, Goldman Sachs Global Investment Research Source: Bloomberg, Company data, Goldman Sachs Global Investment Research
18 April 2024 12
Earnings drivers & outlook

We estimate c.2% standalone regulated equity CAGR in FY23-26E, led by c.Rs150bn
cumulative asset capitalisation and Rs320bn capitalisation from TBCB projects. We
expect TBCB SPVs to contribute 4-6% of consolidated PAT b/w FY24E-26E. Beyond
FY26E, we factor in cost plus and TBCB capex split of 30:70 (incremental project award
towards TBCB but some projects of national importance need to be given on cost plus),
with cost plus projects earning 15% normative RoE while TBCB projects making an
equity RoE of c.14%.
Exhibit 21: Key Earning Drivers

Particulars FY21 FY22 FY23 FY24E FY25E FY26E
Standalone cost plus business
Gross asset base est. (Rs bn) 2,609 2,764 2,822 2,872 2,921 2,968
Closing regulated equity est. (Rs bn) 666 711 724 739 754 768
Normative RoE (%) 15.5 15.5 15.5 15.5 15.0 15.0
Competitive transmission business

Gross asset base est. (Rs bn) 171 202 183 254 276 429
PAT est. (Rs bn) 6.5 8.0 6.5 7.5 7.9 10.8
Others
Consultancy revenue (Rs bn) 4.3 6.7 9.9 8.8 9.7 10.7
Telecom revenue (Rs bn) 7.1 5.8 7.3 8.4 9.0 9.6
Other income (Rs bn) 11.6 10.6 9.8 11.1 10.8 10.3
Tax rate (%) 22.7 14.3 12.8 15.0 15.0 15.0
Source: Company data, Goldman Sachs Global Investment Research

2a216976d69f48d9b2a05ab7ff02f49b
18 April 2024 13
Exhibit 22: Income Statement

Consolidated financials
(Rs mn) FY19 FY20 FY21 FY22 FY23 FY24E FY25E FY26E
Total revenue 347,737 375,702 391,015 409,875 445,340 449,949 453,522 478,494
- employee cost 17,836 19,598 21,148 22,439 25,085 24,759 25,626 26,907
- other expense 30,550 28,436 25,319 28,056 35,946 32,352 34,531 37,546
EBITDA 299,351 327,669 344,548 359,381 384,308 392,838 393,365 414,041

EBITDA margin (%) 86.1 87.2 88.1 87.7 86.3 87.3 86.7 86.5
- depreciation 105,410 116,070 120,392 128,717 133,334 131,973 137,544 144,283

- finance cost 87,366 95,090 81,347 80,362 96,339 94,089 82,389 84,276
+ other income 5,439 8,517 11,621 10,602 9,810 11,095 10,784 10,322
+ regulatory deferral a/c movement (25,269) 16,834 3,617 (5,297) 2,486 47 - -
Core PBT 86,747 141,860 158,047 155,607 166,931 177,918 184,215 195,804
- Forex - - - - - - - -
- MTM (583) (758) (216) (214) (433) - - -
+ exceptional item 2,854 1,733 (5,403) 39,491 10,473 6,817 - -
Reported PBT 90,184 144,350 152,860 195,312 177,837 184,735 184,215 195,804
- Tax (8,864) 35,308 34,643 27,856 22,845 27,710 27,632 29,371

Tax rate (%) (9.8) 24.5 22.7 14.3 12.8 15.0 15.0 15.0
Reported PAT 99,047 109,043 118,218 167,456 154,992 157,025 156,583 166,433
- Minority Interest - - - - - - - -
+ Share in JV PAT 1,288 1,551 2,147 785 (821) (786) (772) (758)
Reported PAT post minority & JV PAT

100,335 110,594 120,365 168,241 154,171 156,239 155,811 165,675
+ Adjustments (2,255) (1,287) 3,208 (32,133) (8,588) (5,590) - -
Recurring PAT 98,080 109,307 123,572 136,107 145,583 150,649 155,811 165,675

Exhibit 23: GSe vs. Consensus - Power Grid consolidated financials

Consolidated FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Revenue 449,949 453,522 478,494 464,838 496,489 518,540 (3.2) (8.7) (7.7)
EBITDA 392,838 393,365 414,041 408,901 427,096 441,020 (3.9) (7.9) (6.1)
2a216976d69f48d9b2a05ab7ff02f49b
PAT 150,649 155,811 165,675 159,129 166,874 177,182 (5.3) (6.6) (6.5)
*as on 11th Apr’24
Exhibit 24: GSe vs Consensus - Power Grid standalone financials

Standalone FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Revenue 411,753 411,136 418,289 453,834 474,546 488,923 (9.3) (13.4) (14.4)
EBITDA 360,490 357,108 360,967 394,097 409,823 421,961 (8.5) (12.9) (14.5)
PAT 149,571 147,293 149,407 153,345 163,154 171,852 (2.5) (9.7) (13.1)
*as on 11th Apr’24
18 April 2024 14
Exhibit 25: Balance Sheet

GFA 2,072,146 2,275,432 2,414,982 2,627,263 2,701,075 2,822,776 2,909,360 3,168,456
Accumulated depreciation 344,750 464,311 577,723 709,534 846,705 978,678 1,116,222 1,260,506
NFA 1,727,396 1,811,121 1,837,259 1,917,728 1,854,370 1,844,098 1,793,138 1,907,950
CWIP 388,267 359,334 252,160 132,985 147,521 200,755 316,685 467,155
Total Fixed Assets 2,115,663 2,170,455 2,089,420 2,050,713 2,001,891 2,044,852 2,109,822 2,375,105
Investment - LT 12,965 14,311 14,856 37,876 34,891 34,105 33,333 32,575

Investment - ST - - - - - - - -
Regulatory deferral balance - - - - - - - -
Other non-current assets 131,571 163,056 227,696 158,147 172,819 172,819 172,819 172,819
Inventory 12,473 14,335 13,669 13,572 13,400 13,538 13,646 14,397

Receivables 110,359 103,919 108,507 150,828 136,945 121,047 104,556 98,037
Cash & bank 43,367 54,390 53,587 50,482 73,846 84,950 97,290 74,972
Loans & advances 3,191 4,240 4,496 5,050 5,535 5,535 5,535 5,535
Other current assets 9,111 6,953 10,385 7,891 28,755 28,755 28,755 28,755
Total current assets 178,500 183,835 190,645 227,823 258,480 253,825 249,780 221,696
Payables 3,651 2,265 1,875 2,671 3,278 3,312 3,338 3,522
Provisions 10,693 11,668 13,071 16,843 15,941 15,941 15,941 15,941
Other current liabilities 104,919 113,087 107,861 96,131 99,803 99,803 99,803 99,803
Net current assets 59,237 56,815 67,837 112,178 139,459 134,770 130,699 102,430
Total Assets 2,319,435 2,404,637 2,399,809 2,358,915 2,349,059 2,386,546 2,446,673 2,682,929
Share capital 52,316 52,316 52,316 69,755 69,755 69,755 69,755 69,755
Reserves & surplus 538,568 594,638 647,045 692,717 760,391 823,295 892,697 971,964
Net worth 590,884 646,954 699,361 762,471 830,145 893,049 962,452 1,041,718
LT debt 1,480,862 1,502,254 1,458,053 1,331,944 1,300,742 1,275,449 1,266,155 1,422,962

ST debt 43,000 30,000 18,000 53,000 6,973 6,849 6,868 7,050
Total debt 1,523,862 1,532,254 1,476,053 1,384,944 1,307,715 1,282,298 1,273,022 1,430,012
Other non-current liabilities 104,504 113,142 106,029 97,929 104,411 104,411 104,411 104,411
Deferred tax liabilities 100,185 112,288 118,366 113,570 106,789 106,789 106,789 106,789
Total Liabilities 2,319,435 2,404,637 2,399,809 2,358,915 2,349,059 2,386,546 2,446,673 2,682,929
2a216976d69f48d9b2a05ab7ff02f49b
18 April 2024 15
Exhibit 26: Cash Flow Statement

Adjusted PAT 98,080 109,307 123,572 136,107 145,583 150,649 155,811 165,675
Add:
Depreciation & Ammortisation 105,410 116,070 120,392 128,717 133,334 131,973 137,544 144,283
Minority interest & profit from associates (1,288) (1,551) (2,147) (785) 821 786 772 758
Finance cost 87,366 95,090 81,347 80,362 96,339 94,089 82,389 84,276
Deferred tax (34,544) 12,103 9,557 (5,283) (6,600) - - -
Less:
Other income 5,439 8,517 11,621 10,602 9,810 11,095 10,784 10,322
Regulatory income / (expense) - - - - - - - -
Net extra-ordinary income 2,854 1,733 (5,403) 39,491 10,473 6,817 - -
Operating cash flow before WC change 246,730 320,770 326,503 289,026 349,194 359,585 365,733 384,670
Change in Inventories (1,979) (1,862) 665 98 172 (139) (107) (751)

Change in Receivables (32,728) 6,440 (4,589) (42,321) 13,883 15,898 16,492 6,519
Change in Other current assets 753 1,110 (3,689) 1,939 (21,348) - - -
Change in Current Liab. (165) 7,756 (4,213) (7,163) 3,376 34 26 184
Working Capital Inflow / (Outflow) (34,119) 13,445 (11,825) (47,446) (3,917) 15,793 16,410 5,951
Cash flow from Operating Activities 212,611 334,214 314,679 241,580 345,278 375,378 382,143 390,622
% of operating cash flow 86.2 104.2 96.4 83.6 98.9 104.4 104.5 101.5
Purchase of Fixed Assets (257,199) (174,353) (32,377) (93,105) (88,348) (174,935) (202,514) (409,566)
Purchase of Investments (725) (1,347) (545) (23,021) 2,164 (0) 0 (0)
Cash flow from capital commitments
(257,923) (175,699) (32,921) (116,126) (86,184) (174,935) (202,514) (409,566)
FCF after Capital Commitments (45,312) 158,515 281,757 125,454 259,094 200,444 179,629 (18,944)
(Purchase) / sale of ST Investments - - - - - - - -

Other Income 5,439 8,517 11,621 10,602 9,810 11,095 10,784 10,322
Cash flow from Investing Activities 5,439 8,517 11,621 10,602 9,810 11,095 10,784 10,322
Issue of share capital during the year - - - - - - - -

Net proceeds from fresh borrowings 148,172 17,925 (52,330) (88,648) (78,956) (25,417) (9,275) 156,989
Dividend paid including tax (54,254) (52,846) (68,220) (108,120) (85,449) (87,745) (86,409) (86,409)
Finance cost (87,366) (95,090) (81,347) (80,362) (96,339) (94,089) (82,389) (84,276)
Reserve adjustments 51,942 (27,730) (86,881) 98,478 4,731 - - -
Cash flow from Financing Activities 58,494 (157,741) (288,777) (178,652) (256,013) (207,251) (178,073) (13,695)
Net extra-ordinary income 2,854 1,733 (5,403) 39,491 10,473 6,817 - -
Total Increase / (Decrease) in Cash 21,476 11,023 (803) (3,105) 23,364 11,104 12,339 (22,318)
2a216976d69f48d9b2a05ab7ff02f49b
18 April 2024 16
Valuation & TP
We derive our 12-month forward target price of Rs355/sh using FY26E SoTP valuation
methodology, where we value:
1. Regulated businesses using price / book multiple derived from core RoE applied to
FY26E regulated equity estimate. We use price / book method to value this business
as normative returns are largely fixed. Core RoE is calculated on regulated equity by
factoring post tax incentives and savings along with the normative equity return. Our
cost of equity of 10.8% is in line with our GS strategist’s CoE estimate of 13.5%,
adjusted for PGCIL’s LT beta of 0.6x.
2. For the competitively won projects already transferred to PGCIL, we model 35 year
NPVs based on levelised bid and estimated capital cost. We value the Consultancy &
Telecom businesses at 12-15x FY26E P/E.
3. Our TP implies FY26E P/BV of 3.2x vs. PGCIL’s LT avg. of 2x and upcycle average of
2.5x, as we believe that the company has a much larger and stable earnings base vs.
that during the previous upcycle - which should help it undertake larger capex in the
upcoming upcycle.
4. We assign an M&A rank of 3 to PGCIL (denoting low likelihood of M&A) given the
government is the major shareholder of the company (51.3% as of Dec’23) and
since it is the largest company in the power transmission segment.
Exhibit 27: SoTP Chart - what is the stock pricing

400 (Rs/sh)
2 4
350 8
17
14
300
250
2a216976d69f48d9b2a05ab7ff02f49b
200
355
318
150
274
100
50
0
Core TBCB Non-grid Other JVs, Cash (less): TP CMP
business businesses subs & Invit unallocated
stake debt
*CMP as on 16th Apr’24
Source: Datastream, Company data, Goldman Sachs Global Investment Research
18 April 2024 17
Exhibit 28: Detailed SoTP

FY26 regulated Target Equity value Value/sh
Business Method
equity (Rs mn) multiple (x) (Rs mn) (Rs)
Transmission RTM DCF impled FY26E P/BV 774,730 3.8 2,961,470 318
TBCB NPV + Invit transaction value 126,928 14
Telecom FY26E PE 15 42,885 5
Consultancy FY26E PE 12 55,546 6
Target FY26E P/BV multiple on
Smart metering 63,704 7
discounted FY30E BV
JP PGCIL Acquisition value 4,743 1
Powerlinks FY26E P/BV - 49% stake 2,387 1.2 1,447 0
Torrent Power Grid FY26E P/BV - 26% stake 900 1.3 304 0
NE Transmission Co. FY26E P/BV - 26% stake 6,368 0.8 1,394 0
15% stake value @ 20% discount
Invit stake 10,707 1
to mcap
Cash FY26E 74,972 8
less: unallocated debt FY26E (39,318) (4)
TP 3,304,783 355
Implied FY26E P/BV 3.2
Exhibit 29: Transmission business DCF snapshot

Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Terminal
(Rs mn) FY25E FY26E FY27E FY28E FY29E FY30E FY35E FY40E FY45E FY46E FY47E FY48E FY49E FY50E Value
Net RoE 115,969 119,685 125,393 133,477 143,660 157,393 244,420 373,326 510,261 525,464 540,530 551,212 562,060 573,008
+ Incentives - post tax 1,785 1,846 1,942 2,077 2,249 2,478 3,886 5,936 8,113 8,355 8,594 8,764 8,937 9,111
+ O&M savings - post tax 668 1,044 738 796 863 962 1,154 1,154 1,154 1,154 1,154 1,154 1,154 1,154
+ Normative WC interest savings - post tax 1,802 1,849 1,937 2,049 2,194 2,374 3,074 3,633 3,842 3,759 3,673 3,558 3,447 3,338
- Security expense not passed through - post tax (431) (431) (431) (431) (431) (431) - - - - - - - -
- Interest on non-core debt - post tax (6,244) (6,917) (6,382) (6,456) (4,886) (4,886) (3,386) (886) - - - - - -
+ Other operating income - post tax 4,958 4,958 4,958 4,958 4,958 4,958 6,388 9,756 13,335 13,732 14,126 14,405 14,689 14,975
PAT (ex-other income) 118,508 122,036 128,155 136,470 148,607 162,848 255,536 392,919 536,705 552,464 568,078 579,094 590,286 601,586
+ Depreciation 130,888 133,235 137,264 143,324 152,142 165,126 249,240 370,122 536,961 570,135 598,839 626,984 644,899 662,654
- Change in WC (163) (1,596) (2,946) (3,760) (4,853) (6,052) (7,341) (8,676) (9,176) (8,977) (8,772) (8,498) (8,232) (7,973)
- Capex (180,384) (256,564) (333,780) (332,997) (348,177) (376,925) (620,220) (745,048) (637,359) (405,713) (402,075) (285,059) (289,504) (292,172)
- Debt repayment (36,551) (3,074) 40,522 88,250 118,712 206,479 426,997 421,999 239,450 42,160 37,142 (58,328) (51,855) (47,129)
FCFE 32,298 (5,963) (30,786) 31,287 66,430 151,476 304,212 431,315 666,581 750,069 793,211 854,192 885,594 916,967 14,250,535
Year - 1 2 3 4 9 14 19 20 21 22 23 24
Discount factor 1.0 0.9 0.8 0.7 0.7 0.4 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1
DCF (5,963) (27,812) 25,534 48,980 100,897 121,936 104,032 96,749 98,350 93,961 91,411 85,617 80,087 1,244,634
Core RoE (%) 15.8 15.8 15.7 15.7 15.7 15.7 15.4 14.7 14.2 14.0 14.0 13.9 13.9 13.9
Fair value 2,937,140 CoE (%) 10.7
2a216976d69f48d9b2a05ab7ff02f49b
Regulated equity - FY26E 768,365 Terminal growth (%) 4.0
Implied P/BV 3.8
Scenario analysis: Our bull case estimates factor higher system level transmission
capex, larger market share for PGCIL in both, inter and intra state segments along with
lower bidding intensity resulting in better returns in competitively won projects. On the
other hand, our bear case factors slower than expected ordering pace, which will
translate to lower market share for PGCIL and higher competitive intensity in new
project auctions, which will result in lower returns. We do not model any beta reduction
led valuation benefit in any of our valuation scenarios. Our bull case fair value implies
FY26E P/BV of 4.1x, which bear case implies 2.1x.
18 April 2024 18
Exhibit 30: Our Bull-case for Power Grid factors larger market share,
lower competitive intensity in competitively bid projects, whereas
our Bear-case factors materially lower transmission capex ramp up
in India
Particulars Base Bull Bear
Transmission asset base (CAGR %;
19.0 20.7 9.3
FY23-30E)
Regulated equity base (CAGR %;

5.4 9.9 2.3
FY23-30E)
Competitive bid project RoEs (bps) 13.9 14.0 12.5
Fair value (Rs/sh) 355 465 235

Implied FY26E P/BV (x) 3.2 4.1 2.1

2a216976d69f48d9b2a05ab7ff02f49b
18 April 2024 19
Investment thesis
We view Power Grid Corporation of India (PGCIL) as the largest beneficiary of our
USD500bn+ grid capex estimate as India undergoes energy transition. It’s large balance
sheet and low cost of debt position it well to capture the bulk of this opportunity, while
its technical capabilities and execution experience will help the company secure large,
complex projects on nomination. Just like NTPC (NTPC.BO; Buy), PGCIL has a material
cost of debt advantage over its private competitors and its strong annual free cash
generation from the legacy cost plus asset base is adequate to fund c.30% of India’s
grid capex requirement b/w FY24-32E, without over leveraging or reducing its current
dividend payout.
Additionally, we believe that PGCIL’s long term beta of c.0.6x is not truly reflective of its
risk profile, as its global peers have a median beta c.55% lower, resulting in materially
higher cost of equity - which impacts PGCIL’s valuations. With comfort around earnings
stability post the recent tariff regulations (which grandfathered legacy asset returns )
and a much larger returns accretive asset base, we expect PGCIL’s beta to match with
its risk profile over time.
Valuation methodology and risks

Valuation methodology: Our 12m TP of Rs355/sh values the regulated transmission
business on P/BV, factoring regulated equity growth, core RoE and 10.8% CoE (GSe of
13.5% adjusted for long-term beta of 0.6x). For valuing the competitively won projects,
we model 35 year NPVs based on levelised bid and estimated capital cost and the
Consultancy & Telecom businesses at 12-15x FY26E P/E.
Key downside risks:
1. Delay / slower than expected pick up in transmission project awards - If the

transmission capex revival is lower than and/or delayed vs. our estimates, our
positive thesis for PGCIL would be at the risk of getting impaired. Lower capex
2a216976d69f48d9b2a05ab7ff02f49b
would translate into lower earnings’ growth 2-3 years later. We view the current
global shortage of transmission equipment also as a risk to our thesis, since it can
also drive capex delays or lead to technology downgrade (shift to lower voltage),
which would impact project costs.
2. Higher competitive intensity in new project auctions - entry of new, well funded
players, larger equity commitments by existing private developers and lower/slower
than expected transmission TAM materialisation can lead to sharper competitive
intensity in new project auctions, thereby impacting return profiles of new projects.
3. Sharp rise in bond yields - this could have a two-pronged impact on PGCIL: 1) it
could reduce the investment attractiveness of the legacy asset base, for which
returns are fixed, akin to a bond, 2) it would increase the refinancing risk for the
competitively won asset base, as debt cost is not allowed as a pass through there.
18 April 2024 20
Hitachi Energy India (HITN.BO): Upstream manufacturing beneficiary of

India’s energy transition; initiate at Buy
Investment Thesis
Direct manufacturing play on India’s energy transition: We view Hitachi Energy India
as a pure upstream manufacturing play on India’s energy transition. Transmission
equipment is one of the few sub-segment where India has high-end manufacturing
capabilities, a robust ancillary supply chain and minimal dependence on China for input
imports. Hitachi is a global leader in high voltage equipment manufacturing and has
achieved meaningful levels of indigenization in India. In fact, Hitachi Energy India
manufactures 80% of Hitachi Energy’s global equipment portfolio with capability to
manufacture c.75-80% of HVDC systems (by value) domestically. We expect Hitachi to
be a significant beneficiary of our US$105bn grid capex estimate for FY24-32E, where it
could have a TAM size of as much as US$50bn. Incrementally, it can also participate in
various non-grid opportunities (electrolyser manufacturing, renewable energy
evacuation, etc.) - where we estimate the relevant TAM to be US$20bn+.
Tailwinds from technology leadership, supply chain diversification: We expect

Hitachi Energy to benefit from three tailwinds - 1) Leadership in high voltage
transmission technology, which is critical for RE integration, will allow the company to
participate in high value domestic and cross border transmission projects, 2) In-house
technology platforms like Lumada (AI/ML, IoT) and GlobalLogic (data analysis) will aid in
expansion of service revenue meaningfully as grid digitization increases, and 3)

increased focus around supply base diversification, especially supply chain
diversification, will likely help improve Hitachi Energy India’s positioning as a global
feeder location at a time when the transmission equipment market is in a phase of
supply deficit.
2a216976d69f48d9b2a05ab7ff02f49b
Where are we different: 1) We believe the transmission grid expansion required for
energy transition will be much larger than and will continue for much longer than the
government’s current estimate of US$35bn transmission capex by FY29E (see our
sector note for more). Our thesis is that the transmission network expansion required
for transition to RE will be exponentially larger given the inherent technicalities like solar
generation being limited to day time hours only; 2) We believe rising electrification and
improving renewable penetration could drive the emergence of new business cases for
Hitachi’s products and services (like the requirement for STATCOM deployment to
manage RE intermittency, power systems in electrolyser and battery storage systems),
and 3) Lastly, we expect incumbents to capture larger market shares and command
better margins vs. the previous transmission upcycle due to the absence of low-cost
Chinese competition.
Risk-reward: The combination of a fast-expanding TAM along with Hitachi’s technology

leadership places it favorably to benefit from India’s upcoming power transmission
capex super cycle. Margin mix improvement from a rise in digitization (service business)
along with the supply chain diversification theme (export revenues), can drive further
18 April 2024 21
upside. At FY26E P/E of 55x, Hitachi Energy is trading in line with the median for global
industrial companies listed in India. We also note that Hitachi’s earnings are still
reflective of bottom-of-cycle margins and will likely inflect once capex picks up.
Earnings and valuation: We forecast an 84% earnings CAGR in FY23-26E, driven by a

sharp pick-up in ordering activity (28% order inflow rise) along with 510bps EBITDA
margin expansion. We initiate coverage with a Buy rating and a 12-month DCF based
target price of Rs8,250, implying an FY26E P/E of 60x.
Key downside risks: Delay in transmission capex cycle pick up, rise in competitive
intensity dragging margins, increase in royalty/technology usage payments to global
parent.
1. Delay/slower-than-expected pick-up in transmission project awards - on

account of either underestimation of grid upgrade by planners/government or delay
in execution due to shortage of transmission equipment (playing out globally).
2. Higher competitive intensity - especially if incumbents undertake manufacturing
capacity expansion but transmission capex doesn’t rise correspondingly. Higher
competitive intensity would not only impact order inflow but would also drag
margins.
3. Increase in royalty / technology payments to parent - as Hitachi Energy India’s
profitability improves and business shifts from legacy systems to those of global
parent. Additionally, deployment of new technologies / solutions like Lumada,
GlobalLogic could require higher payments to parent.
Our thesis in key charts
Exhibit 31: We estimate total grid equipment capex at US$112bn in Exhibit 32: ...which we estimate will translate to a TAM of
FY24-32E… c.US$71bn for grid equipment manufacturers
2a216976d69f48d9b2a05ab7ff02f49b
120
(USD bn) 4 3 80
(USD bn)
2
100 70 3
19
4
60
80 12
41 50
60
106 112
40
71
40
30
50
20 46 20
- 10
National grid + State grid + GH2 Total grid + Power + RE project Total grid
capex capex linked capex supply level equipment -
(FY24-32E) (FY24-32E) transmission (FY24-32E) equipment in transmisison capex TAM from Grid + GH2 linked + Grid equip. + RE park grid + Data center Total TAM
capex electrolysers (FY24-32E) capex grid capex TAM in GH2 TAM TAM (FY24-32E)
Source: CEA, Goldman Sachs Global Investment Research Source: CEA, Goldman Sachs Global Investment Research
18 April 2024 22
Exhibit 33: In FY24-50E, we expect total grid equipment capex of Exhibit 34: ...resulting in a TAM of US$311bn for equipment
US$510bn... manufacturers
600
(USD bn) 350 (USD bn)
16 2
500 17
300 19
17
92
400 250 60
300 191 200
477 510
200 150 311
100 213
100 195
- 50
National grid + State grid + GH2 linked Total grid + Power + RE project Total grid
capex (FY24- capex (FY24- transmission capex (FY24- supply level equipment -
50E) 50E) capex 50E) equipment in transmisison TAM (FY24- TAM from Grid + GH2 linked + Grid equip. + RE park grid + Data center Total TAM
electrolysers 50E) capex grid capex TAM in GH2 TAM TAM (FY24-50E)
Source: CEA, Goldman Sachs Global Investment Research Source: CEA, Goldman Sachs Global Investment Research
Exhibit 35: Hitachi’s e-mesh PowerStore Integrated grid-forming battery energy storage system
Product photograph along with process schematics
2a216976d69f48d9b2a05ab7ff02f49b
Source: Company data
18 April 2024 23
Exhibit 36: Both Hitachi and Hitachi Energy have expertise a play in electrolyser manufacturing; Hitachi Energy supplies power systems to
used in electrolyser stacks
Source: Hitachi
Exhibit 37: Hitachi Energy’s HyFlex hydrogen fuel cell based power generator
2a216976d69f48d9b2a05ab7ff02f49b
18 April 2024 24
Exhibit 38: Schematics of HyFlex fuel cell power generator
The following chart was first published by Japan Industrial Electronics Analyst Ryo
Harada in this note.
Exhibit 39: Hitachi Energy uses GlobalLogic to connect power grids and Lumada
2a216976d69f48d9b2a05ab7ff02f49b
Source: Company data, compiled by Goldman Sachs Global Investment Research
18 April 2024 25
Exhibit 40: We expect Hitachi to benefit from the c.1300bps rise in railway track electrification in the
medium term
140 80
('000 rkm) Total Rkm Rkm electrified % elecrification
70
120
60
100
50
80
40
60
30
40
20
20
10
- 0
Source: Ministry of Railways, CEA, Goldman Sachs Global Investment Research
Exhibit 41: We expect India’s datacenter capacity to triple by Exhibit 42: …which should open a new mkt for Hitachi as ‘power
FY32E… supply’ equipment constitutes 18% of datacenter capex
3.5 30 Commissioning Others

Data center capacity (GW) Power consumption (bkWhr) Walls
6% 4% 1%
3.0
25 Civil work Cables & cable
6% trays
2.5 25%
Mechanical
20 equipment
2.0 6%
15
1.5
Prelims
10 9%
2a216976d69f48d9b2a05ab7ff02f49b
1.0
5
0.5
Mechanical Electrical
installations equipment &
0.0 0 Bus ducts installations
FY22 FY23E FY24E FY25E FY26E FY27E FY28E FY29E FY30E FY31E FY32E
12% 13% 18%
Source: CII, Goldman Sachs Global Investment Research Source: Yotta, data compiled by Goldman Sachs Global Investment Research
18 April 2024 26
Exhibit 43: Rise in share of products and services indicative of Exhibit 44: ...similarly, higher share of exports in overall revenue
business mix improvement mix is margin accretive
Revenue breakdown by segment Revenue breakdown by end-market
Products Projects Services Domestic sales Exports

100% 100%
90% 90%
80% 80%
70% 70%
60% 60%
50% 50%
40% 40%
30% 30%
20% 20%
10% 10%
0% 0%
CY19 CY20 FY22* FY23 FY32E CY19 CY20 FY22* FY23 FY32E
*FY22 numbers are for 15 months as company shifted from CY to FY year-end *FY22 numbers are for 15 months as company shifted from CY to FY year-end
Exhibit 45: We anticipate the combined share of high-margin Exhibit 46: ...with services itself contributing more than 3.5% of
exprorts and services to be 30%+ by FY32E... overall revenue by FY32E - driven by increased digitisation and
deployment of solutions like Lumada and Global Logic
35 4.0 (%) Share of services in overall revenue

(Share in overall Exports Services
revenue; %)
30 3.5
3.5
3.0
25
2.5 2.7
20
2.0
2.1 2.1
15
1.5
10 1.5
1.0
5
0.5
0 0.0
2a216976d69f48d9b2a05ab7ff02f49b
18 April 2024 27
Exhibit 47: Fixed asset turn expected to improve with a rise in Exhibit 48: We estimate 350bps gross margin expansion in FY23-32E
utilization, mix improvement as business mix improves
Gross margin trend
4.2 (%) GFA turnover 40 Gross margin

(%)
4.1 39
4.1
4.1 38.6
4.0 38
37
3.9
37.0
36
3.8 35.9
3.8 35
3.7 3.7
34
3.6
33 33.6
3.6 33.0
3.5 32
3.4 31
3.3 30
Exhibit 49: EBITDA margin bridge - we forecast 900bps+ improvement in Hitachi Energy’s EBITDA margin in
FY23-32E...
18
(Margin bridge; %)
16
14
+436 bps
12
10
+297 bps
8
15.4
6 +42bps
2a216976d69f48d9b2a05ab7ff02f49b
4
5.6
2
0
FY23 EBITDA margin + Order inflow & + Gross margin + Operating leverage FY32E EBITDA margin
execution growth expansion
18 April 2024 28
Exhibit 50: ...similar to how it played out in the previous transmission capex upcycle
EBIT margin vs. order inflow growth of ABB India’s Power Grid business
14 100
(%) Power grid business EBIT margin (%) ABB power grid order inflow growth YoY (%) - RHS
12 80
10 60
8 40
6 20
4 0
2 -20
0 -40
Source: Company data, Visible Alpha, data compiled by Goldman Sachs Global Investment Research
Exhibit 51: Hitachi Energy’s royalties and other payments to group Exhibit 52: Order inflow split by sector - Utility sector gaining
entities as a percentage of revenue is above the industry average prominence as transmission capex picks up, railway electrification
nears completion
10.0 Utilities Industries Transport & infrastructure

(%) Hitachi India - MNC Industrials Avg. 100%
9.0
90%
8.0
80%
7.0
70%
6.0
60%
5.0
50%
8.9 8.7
4.0
2a216976d69f48d9b2a05ab7ff02f49b
40%
6.8
3.0
30%
4.6
2.0 3.7 3.6
3.1 20%
1.0
- 10%
-
FY15 FY20 FY22 FY23 0%
CY19 CY20 FY22 FY23
Source: Company data, data compiled by Goldman Sachs Global Investment Research Source: Company data, data compiled by Goldman Sachs Global Investment Research
18 April 2024 29
Exhibit 53: Hitachi’s 12m fwd P/E vs. 12m fwd order book growth
120 60
Hitachi Energy - 12m fwd P/E (x)
50
100
12m fwd order book growth (%) - RHS
40
80
30
60
DCF implied P/E 20
40
10
20
0
0 -10
Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Dec-26 Dec-27 Dec-28 Dec-29 Dec-30 Dec-31
Exhibit 54: ABB India – 12m fwd P/E vs. overall & power order inflow growth
100 120
12m fwd P/E 12m fwd Order inflow growth - RHS 12m fwd Power order inflow growth - RHS
90 100
80
80
70
60
60
40
50
20
40
0
30
-20
20
2a216976d69f48d9b2a05ab7ff02f49b
10 -40
0 -60
Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19 Jan-21 Jan-23 Jan-25 Jan-27
Source: Company data, Visible Alpha Consensus Data, Datastream, Goldman Sachs Global Investment Research
18 April 2024 30
Exhibit 55: Siemens India – 12m fwd P/E vs. overall & power order inflow growth
90 200
12m fwd P/E (x) 12m fwd Order inflow growth - RHS (%) 12m fwd Energy order inflow growth - RHS (%)
80
150
70
60 100
50
50
40
30 0
20
-50
10
0 -100
Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 Dec-19 Dec-21 Dec-23 Dec-25 Dec-27

We estimate an 84% earnings CAGR in FY23-26E for Hitachi Energy India, driven by a
sharp pick-up in ordering activity (28% order inflow rise as transmission capex materially
increases) along with 510bps EBITDA margin expansion, contributed by both gross
margin expansion of c.230bps and operating leverage benefit of c.280bps.
Our EBIT margin estimates for Hitachi are in line with those reported by comparable
businesses of ABB India (not covered) and Siemens India (not covered), while our RoCE
estimates are conservatively lower than through-the-cycle RoCE reported by Siemens
2a216976d69f48d9b2a05ab7ff02f49b
India’s comparable business.
18 April 2024 31
Exhibit 56: Key earning drivers

(Rs mn) FY21 FY22 FY23 FY24E FY25E FY26E FY27E FY28E FY29E FY30E Comments
All India Transmission Expect pick up in transmission capex as RE
386,485 303,277 412,935 510,388 809,553 962,202 1,050,260 1,042,271 1,022,895 1,063,850
Capex transition gains pace
Hitachi's market share in India's transmission
Hitachi's mkt share (%) 4.0 7.1 11.4 6.8 9.8 11.8 12.8 13.3 13.8 13.5 TAM to rise as large HVDC projects &
STATCOMs get awarded
Order inflow -
Utilities 15,284 21,558 47,039 34,451 78,931 113,059 133,908 138,101 140,648 143,620
Could surprise on the upside if Electrolyser
Industries 7,980 11,279 9,544 10,976 13,720 17,150 21,437 26,796 30,816 35,438
manufacturing picks up
Transport & infrastructure 8,945 12,644 10,908 11,998 12,898 14,188 16,316 18,764 21,578 25,894
Total order inflow 32,209 45,481 67,490 57,425 105,549 144,396 171,661 183,661 193,042 204,951
Average order book 50,278 48,136 58,716 74,487 95,404 133,411 171,929 200,836 218,326 228,546
Execution rate (%) 66.6 98.9 73.8 65.8 73.8 76.3 78.8 79.8 82.3 85.8
Revenue -
Products 23,379 34,023 35,287 39,802 57,395 83,266 110,971 131,004 146,338 158,890
Projects 9,388 12,262 7,115 8,048 11,561 16,714 22,245 26,315 29,503 32,197
Expect service revenue to scale up as Hitachi
Services 710 1,322 943 1,178 1,473 1,841 2,301 2,991 3,889 5,055
rolls out Lumada and Digital Logic solutions
Gross margin (%) 38.6 34.9 33.0 34.2 35.0 35.3 35.6 35.9 36.1 36.4
Payment to parent / group
10.2 8.7 6.8 6.1 6.2 6.2 6.2 6.2 6.2 6.2
entities as % of revenue
Other costs as % of
23.2 22.3 23.6 23.8 21.2 19.2 18.0 17.1 16.6 16.0
revenue
EBITDA margin (%) 7.3 6.4 5.6 5.8 8.8 10.7 12.1 13.1 13.9 14.7 Benefit of operating leverage
Gross Fixed Asset

3.7 4.9 4.0 3.8 3.9 4.0 4.3 4.3 4.2 4.3 Operating leverage, rising share of services
Turnover (x)
Exhibit 57: Annual EBIT margins of ABB & Siemens’ comparable Exhibit 58: We conservatively factor in lower long-term RoCE for
businesses vs. our est. for Hitachi Hitachi than Siemens’ through the cycle returns – mainly on lower
asset turns
16 100 Siemens - Energy segment

(%) ABB - Power Grid business Siemens - Energy business Hitachi Energy (%)
Hitachi Energy
90
14 Siemens - Energy segment 'through the cycle' RoCE
80
12
70
10
60
2a216976d69f48d9b2a05ab7ff02f49b
8 50
40
6
30
4
20
2 10
0 0
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24E
FY25E
FY26E
FY27E
FY28E
FY29E
FY30E
FY31E
FY32E
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24E
FY25E
FY26E
FY27E
FY28E
FY29E
FY30E
FY31E
FY32E
-2
Source: Company data, Visible Alpha Consensus Data, Goldman Sachs Global Investment Source: Company data, Visible Alpha Consensus Data, Goldman Sachs Global Investment
Research Research
18 April 2024 32
Exhibit 59: Income statement

Standalone financials
(Rs mn) CY19 CY20 FY22 FY23 FY24E FY25E FY26E
Core operating revenue 31,898 33,477 47,607 43,345 49,028 70,429 101,821
Other revenue 462 727 1,233 1,340 1,200 1,300 1,400
Total revenue 32,361 34,204 48,840 44,685 50,228 71,729 103,221
- direct costs 20,277 20,274 30,577 28,615 32,261 45,779 65,929
Gross profit 11,621 13,204 17,030 14,730 16,768 24,650 35,892

Gross margin (%) 35.9 38.6 34.9 33.0 33.4 34.4 34.8
- employee cost 2,552 3,694 4,868 4,173 4,590 5,049 5,807

- other expense 6,174 7,728 10,289 9,397 10,457 14,559 20,428
EBITDA 3,358 2,509 3,107 2,500 2,921 6,342 11,058

EBITDA margin (%) 10.4 7.3 6.4 5.6 5.8 8.8 10.7
- depreciation 484 772 955 802 925 1,191 1,666

- finance cost 264 204 414 401 695 1,146 1,815
+ other income 5 185 669 151 350 375 400
Core PBT 2,614 1,718 2,407 1,449 1,651 4,380 7,977
- Forex - - - 141 - - -
- MTM - - - - - - -
+ exceptional item (408) (355) 359 - - - -
Reported PBT 2,207 1,363 2,766 1,308 1,651 4,380 7,977
- Tax 553 365 732 369 438 1,161 2,114

Tax rate (%) 25.0 26.8 26.5 28.2 26.5 26.5 26.5
Reported PAT 1,654 998 2,034 939 1,213 3,219 5,863
+ Adjustments 306 264 (264) - - - -

Recurring PAT 1,960 1,262 1,770 939 1,213 3,219 5,863
Exhibit 60: GSe vs consensus - Hitachi Energy India standalone financials
2a216976d69f48d9b2a05ab7ff02f49b
Revenue 50,228 71,729 103,221 51,089 67,429 N/A (1.7) 6.4 N/A
EBITDA 2,921 6,342 11,058 2,858 5,966 N/A 2.2 6.3 N/A
PAT 1,213 3,219 5,863 1,185 3,597 N/A 2.4 (10.5) N/A
Priced as of April 11, 2024
18 April 2024 33
Exhibit 61: Balance sheet

GFA 7,680 9,147 9,921 11,176 13,176 18,176 25,676
Accumulated depreciation 2,203 2,907 3,714 4,360 5,285 6,477 8,143
NFA 5,477 6,240 6,207 6,815 7,890 11,699 17,533
CWIP 567 374 1,244 506 506 506 506
Total Fixed Assets 6,043 6,615 7,451 7,321 8,396 12,205 18,038
Goodwill 318 318 318 318 318 318 318
Investment - LT - - - - - - -
Investment - ST - - - - - - -
Regulatory deferral balance - - - - - - -
Other non-current assets 134 144 151 474 474 474 474
Inventory 4,932 4,951 7,073 8,179 8,506 11,164 14,651

Receivables 17,829 17,607 15,140 17,801 18,633 25,135 34,050
Cash & bank 1,880 3,190 859 1,633 3,329 2,793 2,679
Loans & advances 129 163 232 57 57 57 57
Other current assets 3,141 1,827 3,668 3,084 3,084 3,084 3,084
Total current assets 27,911 27,737 26,971 30,754 33,609 42,232 54,521
Payables 13,771 15,780 16,190 15,146 15,649 21,856 30,038
Provisions 1,393 1,707 1,743 1,952 1,952 1,952 1,952
Other current liabilities 7,314 7,820 4,050 6,569 6,569 6,569 6,569
Net current assets 5,433 2,430 4,988 7,087 9,439 11,855 15,962
Total Assets 11,928 9,506 12,907 15,200 18,627 24,852 34,792
Share capital 85 85 85 85 85 85 85
Reserves & surplus 8,313 9,240 11,239 12,068 13,096 15,821 20,511
Net worth 8,398 9,325 11,324 12,153 13,180 15,905 20,596
Minority interest
LT debt - 391 650 593 1,993 5,493 10,743
ST debt 3,476 - 1,250 2,750 3,750 3,750 3,750
Total debt 3,476 391 1,900 3,343 5,743 9,243 14,493
Other non-current liabilities 12 9 32 22 22 22 22

Deferred tax liabilities 42 (219) (348) (319) (319) (319) (319)
Total Liabilities 11,928 9,506 12,907 15,200 18,627 24,852 34,792
2a216976d69f48d9b2a05ab7ff02f49b
18 April 2024 34
Exhibit 62: Cash flow statement

Adjusted PAT 1,960 1,262 1,770 939 1,213 3,219 5,863
Add:
Depreciation & Ammortisation 484 772 955 802 925 1,191 1,666
Minority interest & profit from associates
Finance cost 264 204 414 401 695 1,146 1,815
Deferred tax (69) (236) (146) 24 - - -
Less:
Other income 5 185 669 151 350 375 400
Regulatory income / (expense) - - - - - - -
Net extra-ordinary income 408 355 (359) - - - -
Operating cash flow before WC change 2,226 1,462 2,682 2,014 2,483 5,181 8,944
Change in Inventories (236) (19) (2,122) (1,107) (327) (2,658) (3,487)

Change in Receivables (3,690) 221 2,468 (2,662) (832) (6,502) (8,915)
Change in Other current assets (1,240) 1,281 (1,910) 759 - - -
Change in Current Liab. 2,539 2,828 (3,323) 1,684 503 6,207 8,182
Working Capital Inflow / (Outflow) (2,627) 4,312 (4,888) (1,326) (656) (2,953) (4,220)
Cash flow from Operating Activities (401) 5,774 (2,206) 688 1,828 2,228 4,724
% of operating cash flow (18.0) 395.0 (82.3) 34.2 73.6 43.0 52.8
Purchase of Fixed Assets (728) (1,275) (1,644) (516) (2,000) (5,000) (7,500)
Purchase of Investments - - - - - - -
(728) (1,275) (1,644) (516) (2,000) (5,000) (7,500)
FCF after Capital Commitments (1,129) 4,499 (3,850) 172 (172) (2,772) (2,776)
(Purchase) / sale of ST Investments - - - - - - -

Other Income 5 185 669 151 350 375 400
Cash flow from Investing Activities 5 185 669 151 350 375 400
Issue of share capital during the year 85 - - - - - -

Net proceeds from fresh borrowings 3,476 (3,476) 1,250 1,500 2,400 3,500 5,250
Dividend paid including tax - (85) (127) (144) (186) (494) (1,173)
Finance cost (264) (204) (414) (401) (695) (1,146) (1,815)

Reserve adjustments (701) 36 500 (505) - - -
Cash flow from Financing Activities 2,597 (3,730) 1,209 450 1,519 1,860 2,262
Net extra-ordinary income 408 355 (359) - - - -
Total Increase / (Decrease) in Cash 1,880 1,309 (2,330) 774 1,697 (537) (114)
2a216976d69f48d9b2a05ab7ff02f49b
Valuation & TP
We derive our 12-month forward target price of Rs8,250/sh by forecasting 15 year free
cash flows and discounting it to FY26E by an 11.4% cost of equity and ascribing 5%
terminal growth. We use a FCF-based valuation method as we expect Hitachi Energy’s
earnings to inflect materially as transmission capex cycle picks up, making it difficult to
determine the exit year for applying target valuation multiple. We also expect the sharp
pick up in business to require regular capex for capacity upgrades, which will be
appropriately recorded in cash flows. Our FCF incorporates -
1. c.14% revenue CAGR in FY23-40E, led by materialisation of our transmission TAM

estimate.
2. Gross margin expansion of c.750bps from 33% in FY23 to 40.5% by FY40E, on the
back of product mix improvement from a rise in exports and service revenue.
3. EBITDA margin expansion of 1500bps+ on account of higher gross margins and
operating leverage benefit, albeit against a weak base.
4. Corresponding capex rise to keep fixed asset turns in-line with 3.5-4.5x range.
18 April 2024 35
5. We assign an M&A rank of 3 to Hitachi Energy India (denoting low likelihood of

M&A) given it is majority owned by global parent Hitachi (6501.T; Buy) - 75% as of
Dec’23).
Exhibit 63: Hitachi Energy India - DCF snapshot

(Rs mn) FY25E FY26E FY27E FY28E FY29E FY30E FY31E FY32E FY33E FY34E FY35E FY36E FY37E FY38E FY39E FY40E
All India transmission capex 809,553 962,202 1,050,260 1,042,271 1,022,895 1,063,850 1,060,232 1,190,904 1,358,157 1,468,260 1,674,567 1,634,607 1,761,418 1,697,838 1,716,908 1,772,038
- Transmission capex growth YoY (%) 58.6 18.9 9.2 (0.8) (1.9) 4.0 (0.3) 12.3 14.0 8.1 14.1 (2.4) 7.8 (3.6) 1.1 3.2
Hitachi India's mkt share (%) 9.8 11.8 12.8 13.3 13.8 13.5 13.3 13.0 13.1 13.1 13.2 13.2 13.3 13.3 13.4 13.4
- Market share gain YoY (bps) 300 200 100 50 50 (25) (25) (25) 5 5 5 5 5 5 5 5
Order inflow 105,549 144,396 171,661 183,661 193,042 204,951 210,535 234,984 269,017 299,238 342,587 369,252 399,405 396,102 402,057 416,521
- Order inflow growth YoY (bps) 83.8 36.8 18.9 7.0 5.1 6.2 2.7 11.6 14.5 11.2 14.5 7.8 8.2 (0.8) 1.5 3.6
Opening order book 78,265 113,385 155,960 192,104 215,455 228,767 237,577 239,796 253,909 277,584 305,984 344,875 375,972 406,403 413,692 418,920
Order inflow 105,549 144,396 171,661 183,661 193,042 204,951 210,535 234,984 269,017 299,238 342,587 369,252 399,405 396,102 402,057 416,521
Closing order book 113,385 155,960 192,104 215,455 228,767 237,577 239,796 253,909 277,584 305,984 344,875 375,972 406,403 413,692 418,920 429,133
Average order book 95,404 133,411 171,929 200,836 218,326 228,546 233,220 240,545 265,747 291,784 325,430 360,424 391,188 410,048 416,306 424,027
Execution rate (%) 73.8 76.3 78.8 79.8 82.3 85.8 89.3 91.8 92.3 92.8 93.3 93.8 94.3 94.8 95.3 95.8
- YoY change in execution rate (bps) 800 250 250 100 250 350 350 250 50 50 50 50 50 50 50 50
Share of service & exports in total revenue 27.2 28.4 28.5 28.9 29.5 30.2 31.0 31.6
- YoY change (bps) (119) 123 15 42 55 66 82 66
Gross margin (%) 35.0 35.3 35.6 35.9 36.1 36.4 36.7 37.0 37.5 38.0 38.5 39.0 39.4 39.7 40.2 40.5
Payment made to parent & group entities as
% of revenue 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.1 6.0 5.9 5.8 5.7 5.6 5.5 5.4
Other operating costs as % of revenue 21.2 19.2 18.0 17.1 16.6 16.0 16.0 15.9 15.7 15.4 15.2 14.9 14.7 14.4 14.2 13.9
EBITDA 6,342 11,058 16,561 21,266 25,268 29,150 31,627 34,222 38,369 44,659 52,658 61,508 69,881 76,360 81,307 85,687
EBITDA margin (%) 8.8 10.7 12.1 13.1 13.9 14.7 15.0 15.4 15.6 16.5 17.3 18.2 18.9 19.6 20.5 21.1
Depreciation 1,191 1,666 2,179 2,635 3,091 3,395 3,585 3,813 3,963 4,113 4,263 4,413 4,763 5,113 5,463 5,813
Finance cost 1,146 1,815 2,537 3,142 3,386 2,927 2,086 1,245 1,245 1,245 1,245 1,245 1,245 1,245 1,245 1,245
Tax 1,061 2,008 3,139 4,105 4,980 6,049 6,878 7,728 8,788 10,415 12,495 14,800 16,926 18,550 19,769 20,837
PAT (ex-post tax other income) 2,943 5,569 8,706 11,384 13,811 16,778 19,077 21,435 24,373 28,886 34,655 41,049 46,946 51,451 54,830 57,792
Depreciation 1,191 1,666 2,179 2,635 3,091 3,395 3,585 3,813 3,963 4,113 4,263 4,413 4,763 5,113 5,463 5,813
Capex (5,000) (7,500) (6,000) (6,000) (6,000) (2,000) (3,000) (3,000) (3,000) (3,000) (3,000) (3,000) (7,000) (7,000) (7,000) (7,000)
Working capital (2,953) (4,220) (7,987) (7,060) (6,549) (3,664) 156 418 451 508 579 652 708 737 747 748
Debt repayment 3,500 5,250 4,200 3,700 (500) (5,500) (5,500) (5,500) (5,393) - - - - - - -
FCFE (318) 765 1,097 4,660 3,853 9,009 14,318 17,166 20,395 30,507 36,498 43,114 45,418 50,302 54,040 57,353 946,639
Period - - 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Discount factor - 1.0 0.9 0.8 0.7 0.7 0.6 0.5 0.5 0.4 0.4 0.3 0.3 0.3 0.2 0.2 0.2
DCF - 765 985 3,758 2,790 5,858 8,360 9,000 9,602 12,898 13,856 14,698 13,904 13,828 13,340 12,713 209,842
RoCE (%) 16.1 20.5 23.6 24.2 24.7 26.5 26.2 25.5 24.0 24.9 25.9 26.6 26.4 25.3 23.8 22.3
PV of FCF 346,199 CoE (%) 11.4

+FY26 cash 2,679 Terminal growth (%) 5.0
Value/sh 8,250

Our bull case estimates factor higher system level transmission capex, larger market
share for Hitachi, larger gross and EBITDA margins expansion due to superior product
mix, lower competitive intensity and higher operating leverage. Our bull case fair value
implies an FY26E P/E of 100x - derived from ascribing our base case implied P/E
multiple of 60x to FY30E EPS and discounting it back to FY26E using GSe CoE of
2a216976d69f48d9b2a05ab7ff02f49b
13.5%. In our bear case, we assume lower transmission capex and higher competitive
intensity, which would result in lower market share gain for Hitachi and inferior gross
and EBITDA margins. Our bear case fair value implies FY26E P/E of 32x and is derived
using the same methodology as our bull-case fair value.
18 April 2024 36
Exhibit 64: Our bull case for Hitachi Energy India factors in sharper order inflow growth, larger market
share gain and higher operating leverage, whereas our bear case factors in lower transmission capex
ramp up and materially lower margin improvement
Transmission asset base (CAGR %; FY23-
19.0 20.7 17.1
30E)
Order inflow (CAGR %; FY23-30E) 17.0 19.8 13.1
Market share change (bps; FY23-30E) 211 225 211
Gross margin change (bps; FY23-30E) 344 394 184
Operating leverage change (bps; FY23-30E) 569 609 166
FY26E EPS 138 157 78

FY30E EPS 413 451 168
Implied P/E (x) 60 100 32
Fair value (Rs/sh) 8,250 15,625 5,450
Exhibit 65: Relative positioning - Indian MNC industrial companies trade at significant premium to their global parents; Hitachi’s CROCI to
improve meaningfully as operating leverage kicks in with order inflow pick up
35.0 ABB India
30.0
25.0 Siemens India
20.0
EV / GCI
15.0 Schneider Electric -

Cummins India FY26E

Hitachi Energy India - FY30E
2a216976d69f48d9b2a05ab7ff02f49b
FY26E
5.0 ABB Schneider Elec. Global
Hitachi Energy India - Siemens
Hitachi Global FY30E
-
- 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0
(5.0)
CROCI
18 April 2024 37
Investment thesis
We view Hitachi Energy India as a pure upstream manufacturing play on India’s energy
transition, with its technology leadership in the high-voltage equipment segment and
highly indigenized manufacturing capabilities. We expect Hitachi to be a significant
beneficiary of our US$100bn/US$500bn grid capex estimate by FY32E/50E, in addition
to the US$14bn/US$51bn non-grid related transmission equipment spend over the same
period.
Additionally, Hitachi Energy India is also expected to be a beneficiary of rising grid

digitalization (opportunity to differentiate and increase share of recurring, high-margin
service revenue), global transmission equipment shortage (could improve export pricing
power and factory utilization) and supply chain diversification themes (potentially
enhances India’s positioning as a global feeder factory).

Valuation methodology: We derive our 12-month forward target price of Rs8,250/sh
(implied FY26E P/E of 60x) by forecasting free cash flows out to FY40E and discounting
to FY26E by an 11.4% cost of equity and ascribing 5% terminal growth. Our FCF
incorporates a c.14% revenue CAGR and 750bps/1500bps gross/EBITDA margin
expansion, respectively, in FY23-40E.
intensity dragging margins, increase in royalty/technology usage payments to global
parent.
1. Delay/slower-than-expected pick-up in transmission project awards - on

account of either underestimation of grid upgrade by planners / government or delay
in execution due to shortage of transmission equipment (playing out globally).
2. Higher competitive intensity - especially if incumbents undertake manufacturing
2a216976d69f48d9b2a05ab7ff02f49b
capacity expansion but transmission capex doesn’t rise correspondingly. Higher
competitive intensity would not only impact order inflow but would also drag
margins.
3. Increase in royalty / technology payments to parent - as Hitachi Energy India’s
profitability improves and business shifts from legacy systems to those of global
parent. Additionally, deployment of new technologies / solutions like Lumada,
GlobalLogic could require higher payments to parent.
18 April 2024 38
Schneider Electric Infrastructure Ltd. (SEIN.BO): Potential beneficiary of

distribution capex expansion and energy efficiency drive, but unfavorable
risk-reward; initiate at Sell
Investment Thesis
RDSS to boost electricity distribution TAM: As part of power distribution sector
reforms, the Indian government launched the Revamped Distribution System Scheme
(RDSS), with two major components 1) Financial support for Prepaid Smart Metering &
System Metering and upgradation of the Distribution Infrastructure, and 2) Training &
Capacity Building and other Enabling & Supporting Activities. We expect the Revamped
Distribution System Scheme (RDSS) to drive US$37bn capex in distribution system
expansion and strengthening over the next 5 years. So far, projects worth US$14bn have
been sanctioned under the scheme, of which we estimate Schneider Electric Infra
(SEIL) to have a play in 50%+ of the total capex outlay (Exhibit 70). Additionally, the
company highlighted it is working towards leveraging global technology platform of its
parent company (SCHN.PA, covered by Daniela Costa) to improve its service offerings,
which we believe could position SEIN as a manufacturing alternative for parent
company’s existing manufacturing base, in the longer term.
Carbon taxes could open large opportunity: With the proposed implementation of
European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM) 2026 onwards,
which intends to impose tariffs on carbon emissions on goods entering EU, we believe
the criticality of energy efficiency improvement will increase significantly, given it is

among the lowest hanging fruits for carbon abatement. We expect Schneider to benefit
given its energy management expertise as it offers equipment and services which help
in tracking and reducing energy usage in processes. Bureau of Energy Efficiency,
Ministry of Power has pegged India’s total energy efficiency market size at USD9bn, of
2a216976d69f48d9b2a05ab7ff02f49b
which only 5% has been tapped yet.
But risk-reward unfavorable on valuation: While we see Schneider as a potential

beneficiary of the imminent pick up in power distribution capex and the large energy
efficiency opportunity, 375% rise in share price over the last 12 months has driven
valuation to c.57x FY26E P/E, which appears expensive considering we expect
company’s RoCE to remain sub-30%. Further, unlike Hitachi Energy India, Schneider
Electric Infra’s products do not entail high-end technology and hence we expect the
company to have sufficient pricing power to warrant the current high multiples. Our
reverse DCF indicates that the stock is currently factoring c.8% terminal growth (vs. our
coverage average of 4-5%), even with our estimated 18% core earnings CAGR b/w
FY23-40E.
RDSS and energy efficiency solutions to drive growth: We believe Schneider can be
a potential beneficiary under the Distribution Infrastructure Upgradation initiative of the
RDSS scheme, which will account of 2/3rd of the total scheme outlay; we assess that
Schneider’s product profile exposes it to 50%+ of the potential capex spend.
Incremental to this, we also expect Schneider to benefit from rise in demand for energy
18 April 2024 39
efficiency solutions with the like imposition of CBAM.
Earnings & valuation: 43% earnings CAGR b/w FY23-26E, driven by RDSS led
distribution capex pick up, mix improvement and new plant commissioning. We initiate
at Sell with a 12M TP of Rs470/sh (DCF-based) – implied FY26E P/E of 35x (41%
downside potential vs. 9% median upside potential of our power transmission
coverage).
Key upside risks and what could make us positive:
1. As state governments begin receiving capital subsidy from the central government
under the RDSS, a sharper than expected ramp up in distribution capex vs. our
estimates could result in upside to our forecasts. On this front, greater visibility on
higher/sustainable capex could cause us to revisit our investment views on the
stock.
2. Privatisation of power distribution / rise in parallel distribution licensing could lead to
accelerated distribution capex spend, thereby resulting in quicker than expected
materialisation of our TAM estimate.
3. In our view, capex on energy efficiency will be sensitive to quantum of carbon tax in
the future, with higher carbon taxes incentivising industries to invest more, thereby
increasing the TAM for Schneider and expediting its materialisation.
4. Access to / transfer of new technologies / products from parent for manufacture and
sale from India could open newer profit pools for Schneider Electric Infra.
Thesis in key charts
Exhibit 66: Rising renewable penetration, ongoing distribution reforms in India open large TAM for Schneider
30
(USD bn)
2a216976d69f48d9b2a05ab7ff02f49b
2
25
2
2
20
5
15
27
10 23
10
5 4
6
3
0
Solar & wind GH2 power FY24-32E New Distribution MV switchgear Instrument FY24-32E New Data center Railway & FY24-32E Total
park supply Energy TAM transformer transformer Energy & electrical equip. Metro TAM TAM
a
transmission equipment Distribution TAM
upgrade TAM
Source: CEA, Ministry of Power, Goldman Sachs Global Investment Research
18 April 2024 40
Exhibit 67: Power distribution has the lowest level of digitsation in Exhibit 68: ...…with technical losses being 2x global avg. on
the entire electricity value chain... distribution infra inadequacy
30 25
80 (%) Level of digitisation (U (T&D loss; %)
70 25
20
60
20
50 15
15
40
75 75
10
10
30
20 5 5
25
10
0
So 0
0 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Global
Generation Infra Transmission Infra Distribution Infra avg.
tra
Source: Company data, Data compiled by Goldman Sachs Global Investment Research Source: PFC, CEA, Data compiled by Goldman Sachs Global Investment Research
Exhibit 69: Financial sustainability of DISCOMs has been deteriorating with subsidies now constituting
almost a fifth of total revenues
2,000 (Rs bn) 20

DISCOM losses (ex-subsidy) Subsidy booking as % of revenue - RHS
1,800 18
1,600 16
1,400 14
1,200 12
1,000 10
800 8
600 6
400 4
200 2
2a216976d69f48d9b2a05ab7ff02f49b
0 0
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
Source: PFC, Data compiled by Goldman Sachs Global Investment Research
18 April 2024 41
Exhibit 70: Based on our analysis of projects sanctioned & awarded under the Revamped Distribution
Sector Scheme (RDSS) so far, Schneider has a potential play in 50%+ of the scheme capex. A large part of
this opportunity is yet to materialize as capex equivalent to barely 25% of the scheme outlay has been
approved so far
600 (Rs bn)

Schneider's addressable
Sanctioned Cost Awarded Cost
segments
500
484
400
407
300
285
200 225
100
97
64
47 54 48
12 10 35 2 9
0
Feeder Votlage Substation & Digitisation Cabling & Line capacity Others
separation, augmentation transformer conductoring augmentation
segregation capacity addition
*based on the overlap of segments for which funds have been sanctioned and where Schneider Electric Infra has products
Source: Ministry of Power, Data compiled by Goldman Sachs Global Investment Research
Exhibit 71: Like Hitachi, Schneider also has a play in the electrical Exhibit 72: Govt’s PAT scheme has helped save 34mn te oil
components of datacenter capex... equivalent (mtoe) energy so far, with the first 2 cycles helping
abate 97mtpa CO2…
Energy saving (mtoe)
Commissioning Others 16 (mtpa CO2) 70

Walls (mtoe)
6% 4% 1% 66
Civil work Cables & cable 14 60
6% trays 14
2a216976d69f48d9b2a05ab7ff02f49b
25% Energy saving
Mechanical 12
Carbon abatement - RHS 50
equipment
6% 10
40
8
Prelims 31 30
9% 6 7
20
4
Mechanical Electrical
2 10
installations equipment &
Bus ducts 1 1
12% installations 9 2 1
13% 18% 0 -
Cycle - I Cycle - II Cycle - III Cycle - IV Cycle - V Cycle - VI Cycle - VII
Source: Yotta, Data compiled by Goldman Sachs Global Investment Research Source: BEE, Data compiled by Goldman Sachs Global Investment Research
18 April 2024 42
Exhibit 73: …with Power Generation, Distribution and Iron & Steel Exhibit 74: 100%+ annual execution rate indicative of short cycle
industries reporting largest energy savings nature of business; order inflow has recovered since Covid lows
Energy saving (mtoe)
4.0 Aluminium Cement Chlor-Alkali 18 Order inflow Execution rate - RHS (%) 180
(Rs bn)
Fertiliser Iron & Steel Pulp & Paper 16 160
3.5
Textile Thermal Power Plants Railway
14 140
3.0 Refineries DISCOMs
12 120
2.5
10 100
2.0
8 80
1.5 6 60
1.0 4 40
2 20
0.5
0 0
0.0 FY19 FY20 FY21 FY22 FY23
(mtoe) Cycle - I Cycle - II
Source: BEE, Data compiled by Goldman Sachs Global Investment Research Source: Company data, Data compiled by Goldman Sachs Global Investment Research
Exhibit 75: While we estimate 14.7% / 11.4% CAGR in domestic Exhibit 76: ...we don’t expect the contribution of exports and
sales and exports respectively... services to improve materially as they will be outpaced by the
domestic product business growth
Domestic sales Exports 18.0

100% (%) Share of services Share of exports
1.4 1.4 2.2 5.8 16.0
90% 2.4
14.0
80%
70% 12.0
60% 10.0
50% 8.0 15.7
12.5 11.5 15.6 53.7

40% 12.9
6.0 12.3
11.0
30% 10.1 9.7
4.0 7.3
20% 5.8 6.1 6.6
5.2
2.0
10%
-
0%
FY20 FY21 FY22 FY23 FY32E
2a216976d69f48d9b2a05ab7ff02f49b
Source: Company data, Data compiled by Goldman Sachs Global Investment Research Source: Company data, Data compiled by Goldman Sachs Global Investment Research
Exhibit 77: Steady cost-plus inter-group sales provides certainty of Exhibit 78: Gross margin improvement driven by mix upgrade…
asset utilisation
External sales Inter-group sales 40

(%) Gross margin
100%
35
90% 3.1 2.5 3.6 3.8 13.0
80% 30
70%
25
60%
20
50% 36
15 31 32
40% 10.8 10.5 14.0 46.5 29 29
11.7
30% 10
20%
5
10%
0
0%
Source: Company data, Data compiled by Goldman Sachs Global Investment Research Source: Company data, Goldman Sachs Global Investment Research
18 April 2024 43
Exhibit 79: ..and control of non-core expenses, further improving Exhibit 80: EBITDA margin bridge - we forecast 450bps
the operating leverage improvement in Schneider’s EBITDA margin between FY23-32E...
18
(as % of revenue) (%)
30 Employee exp. Royalty & other grp pymnt Other exp. 16
1.8 15.9
25 14
4.5
7 7 12
20 5
5 0.0
10
4 5 5
4 9.7
15 4 8
4
6
10
4
15 14 14 13
5 11 2
0
0 FY23 EBITDA + Order inflow & + Gross margin + Operating FY30E EBITDA
FY20 FY21 FY22 FY23 FY32E margin execution growth expansion leverage margin
Exhibit 81: Schneider India lags global parent’s gross margins and
has a lower contribution by services in its overall revenues
*Schneider India’s data for FY23, Schneider Global’s for CY22
2a216976d69f48d9b2a05ab7ff02f49b
Exhibit 82: Schneider expects the upcoming Kolkata factory to serve domestic & group exports by
contributing to revenues / improving value addition
18 April 2024 44
Exhibit 83: Schneider’s gross margins are converging with industry Exhibit 84: ...while its royalty & other payments to group entities
average lower than other MNC industrial companies listed in India
40 5.0 (%)
(Gross margin; Schneider India - MNC Industrials Median Schneider India - MNC Industrials Avg.
%) 4.5
35
4.0
30
3.5
25 3.0
20 2.5
5 5
34 34 34 32 32 32 2.0
15 31 29 4 4
28 29
1.5 3 3 3 3
10 1.0
5 0.5
-
0 FY15 FY20 FY22 FY23
FY19 FY20 FY21 FY22 FY23
Source: Company data, Visible Alpha Consensus Data, Goldman Sachs Global Investment Source: Company data, Visible Alpha Consensus Data, Goldman Sachs Global Investment
Research
2a216976d69f48d9b2a05ab7ff02f49b
18 April 2024 45

We estimate 43% earnings CAGR b/w FY23-26E for Schneider Electric Infra, driven by
c.30% CAGR rise in order booking (led by RDSS driven distribution spend increase),
c.23% CAGR increase in inter-group sales (from commissioning of Kolkata factory),
315bps gross margin expansion and consequentially, c.525bps increase in EBITDA
margin expansion.
Exhibit 85: Key earning drivers

(Rs mn) FY21 FY22 FY23 FY24E FY25E FY26E FY27E FY28E FY29E FY30E Comments
Medium term boost by RDSS driven
All India DISCOM capex 523,440 544,400 680,500 755,637 807,516 1,111,274 1,263,153 750,000 787,500 826,875
ordering
Distribution equipment mkt 433,223 611,782 563,585 625,813 668,779 920,350 1,046,135 621,145 652,202 684,812
Schneider's mkt share(%) 1.1 1.1 1.4 1.7 1.9 2.2 2.3 2.5 2.6 2.8
Order inflow -
Utility business 4,825 6,969 7,688 10,571 12,968 20,148 24,470 15,461 17,212 19,100
Share of utility business in total Increase b/w FY24-28E on account of
50.0 50.0 50.0 55.0 57.5 60.0 65.0 55.0 50.0 49.0
order inflow RDSS
Total Order Inflow 9,649 13,938 15,376 19,220 22,554 33,579 37,647 28,111 34,425 38,980
Average order book 8,214 8,525 10,139 11,216 12,678 17,148 22,652 21,839 20,040 22,451
Execution rate (%) 130.4 138.7 142.7 150.0 150.0 145.0 140.0 145.0 150.0 150.0 Short cycle business
Revenue -
External 10,453 11,740 13,974 18,413 20,756 26,771 33,800 33,953 32,567 36,424
- of which, Services 789 1,008 1,303 1,433 1,576 1,734 1,907 2,098 2,308 2,539
Inter-group sale to rise with
Inter-group 2,518 3,564 3,798 4,178 5,578 6,978 8,378 8,880 9,769 10,745 commissioining of Kolkata factory in
FY25E
Gross margin (%) 30.9 29.3 32.0 35.0 35.0 35.2 35.3 35.5 35.7 35.9
Payment to parent / group entities as
3.5 3.1 3.0 3.0 3.0 3.3 3.6 3.7 3.7 3.7
% of revenue
Other costs as % of revenue 22.2 20.4 19.4 19.0 18.3 17.0 15.9 15.8 16.1 16.2
EBITDA margin (%) 5.2 5.8 9.7 13.0 13.7 14.9 15.8 16.0 15.9 15.9 Benefit of operating leverage
Operating leverage, rising share of

Gross Fixed Asset Turnover (x) 3.2 3.6 4.0 3.9 3.6 3.8 4.1 4.1 3.9 3.8
services
2a216976d69f48d9b2a05ab7ff02f49b
18 April 2024 46
Exhibit 86: Income Statement

Core operating revenue 13,715 13,731 12,862 15,123 17,642 22,435 26,171 33,577
Other revenue 188 113 110 180 130 156 163 172
Total revenue 13,903 13,844 12,971 15,303 17,772 22,591 26,334 33,748
- direct costs 10,010 9,830 8,963 10,814 12,085 14,684 17,117 21,886
Gross profit 3,893 4,014 4,008 4,489 5,686 7,907 9,217 11,863
Gross margin (%) 28.0 29.0 30.9 29.3 32.0 35.0 35.0 35.2
- employee cost 1,997 2,095 1,847 2,104 2,359 2,713 3,133 3,979
- other expense 1,532 1,585 1,492 1,493 1,612 2,257 2,483 2,855
EBITDA 363 333 669 892 1,715 2,937 3,601 5,028

EBITDA margin (%) 2.6 2.4 5.2 5.8 9.7 13.0 13.7 14.9
- depreciation 258 218 221 173 185 225 360 463

- finance cost 443 481 482 485 530 489 470 470
+ other income 435 120 185 99 122 69 80 79
Core PBT 97 (246) 151 334 1,122 2,293 2,851 4,174
- Forex 61 64 31 32 38 - - -
- MTM - - - - - - - -
+ exceptional item (280) 14 (130) (26) 153 (34) - -
Reported PBT (244) (296) (10) 276 1,236 2,259 2,851 4,174
- Tax - - - - - 45 684 1,002

Tax rate (%) - - - - - 2.0 24.0 24.0
Reported PAT (244) (296) (10) 276 1,236 2,214 2,167 3,172
+ Adjustments 280 (14) 97 26 (153) 34 - -
Recurring PAT 36 (309) 87 302 1,083 2,248 2,167 3,172

Exhibit 87: GSe vs. Consensus - Schneider Electric Infra standalone financials

Revenue 22,591 26,334 33,748 22,360 26,752 31,262 1.0 (1.6) 8.0
EBITDA 2,937 3,601 5,028 2,862 3,424 4,095 2.6 5.2 22.8
2a216976d69f48d9b2a05ab7ff02f49b
PAT 2,248 2,167 3,172 2,219 2,682 3,339 1.3 (19.2) (5.0)
*as on 11th Apr’24.
18 April 2024 47
Exhibit 88: Balance Sheet

GFA 3,806 3,980 4,008 4,226 4,455 5,855 7,355 8,855
Accumulated depreciation 722 839 1,010 1,141 1,255 1,480 1,839 2,303
NFA 3,085 3,141 2,998 3,085 3,199 4,375 5,515 6,552
CWIP 64 42 84 60 143 143 143 143
Total Fixed Assets 3,148 3,182 3,082 3,146 3,343 4,518 5,659 6,695
Goodwill - - - - - - - -
Investment - LT - - - - - - - -
Investment - ST - - - - - - - -
Regulatory deferral balance - - - - - - - -
Other non-current assets 590 653 745 740 816 816 816 816
Inventory 2,421 2,185 2,202 2,258 2,974 3,626 4,407 5,879

Receivables 4,175 4,338 4,643 4,545 5,459 6,630 7,873 10,552
Cash & bank 184 133 229 361 196 201 254 197
Loans & advances 101 114 80 124 103 103 103 103
Other current assets 857 589 510 524 660 660 660 660
Total current assets 7,739 7,359 7,665 7,812 9,391 11,219 13,296 17,391
Payables 4,720 4,457 4,277 4,592 5,403 6,559 7,826 10,260
Provisions 1,053 977 926 891 987 987 987 987
Other current liabilities 161 89 123 95 125 125 125 125
Net current assets 1,805 1,835 2,339 2,235 2,876 3,548 4,358 6,018
Total Assets
5,543 5,671 6,165 6,120 7,034 8,882 10,832 13,529
Share capital 478 478 478 478 478 478 478 478
Reserves & surplus (244) (464) (443) (117) 1,033 3,280 5,231 7,927
Net worth 234 14 35 361 1,511 3,758 5,709 8,405
Minority interest
LT debt 1,918 4,453 4,475 4,675 4,801 4,401 4,401 4,401
ST debt 3,362 1,155 1,609 1,048 700 700 700 700
Total debt 5,281 5,608 6,084 5,723 5,501 5,101 5,101 5,101
Other non-current liabilities 28 48 45 37 23 23 23 23

Deferred tax liabilities - - - - - - - -
Total Liabilities 5,543 5,671 6,165 6,120 7,034 8,882 10,832 13,529
2a216976d69f48d9b2a05ab7ff02f49b
18 April 2024 48
Exhibit 89: Cash Flow Statement

Adjusted PAT 36 (309) 87 302 1,083 2,248 2,167 3,172
Add:
Depreciation & Ammortisation 258 218 221 173 185 225 360 463
Minority interest & profit from associates
Finance cost 443 481 482 485 530 489 470 470
Deferred tax - - - - - - - -
Less:
Other income 435 120 185 99 122 69 80 79
Regulatory income / (expense) - - - - - - - -
Net extra-ordinary income 280 (14) 130 26 (153) 34 - -
Operating cash flow before WC change 22 283 474 835 1,830 2,857 2,917 4,027
Change in Inventories 295 237 (18) (55) (716) (652) (781) (1,472)
Change in Receivables (45) (163) (306) 99 (915) (1,171) (1,243) (2,679)
Change in Other current assets 84 255 114 (59) (115) - - -
Change in Current Liab. (1,882) (411) (198) 251 939 1,156 1,267 2,434
Working Capital Inflow / (Outflow) (1,547) (82) (407) 236 (807) (667) (757) (1,716)
Cash flow from Operating Activities (1,525) 201 67 1,070 1,023 2,190 2,160 2,310
Purchase of Fixed Assets 238 (152) (70) (195) (312) (1,400) (1,500) (1,500)
Purchase of Investments - - - - - - - -
238 (152) (70) (195) (312) (1,400) (1,500) (1,500)
FCF after Capital Commitments (1,287) 49 (3) 876 712 790 660 810
(Purchase) / sale of ST Investments - - - - - - - -

Other Income 435 120 185 99 122 69 80 79
Cash flow from Investing Activities
Issue of share capital during the year - - - - - - - -

Net proceeds from fresh borrowings 807 208 533 (374) (235) (400) 0 0
Dividend paid including tax - - - - - - (217) (476)
Finance cost (443) (481) (482) (485) (530) (489) (470) (470)
Reserve adjustments (118) 65 (267) (11) (81) - - -
Cash flow from Financing Activities 247 (208) (216) (869) (846) (889) (687) (946)
Net extra-ordinary income 280 (14) 130 26 (153) 34 - -
Total Increase / (Decrease) in Cash (325) (51) 96 132 (166) 5 53 (57)
2a216976d69f48d9b2a05ab7ff02f49b
18 April 2024 49
Valuation & TP
We derive our 12-month forward target price of Rs470/sh by forecasting 25 year free
cash flows, in line with Hitachi Energy India, in our transmission coverage, discounted to
FY26E at an 11.4% cost of equity and ascribing 5% terminal growth. Our FCF
incorporates -
1. 10% revenue CAGR b/w FY23-50E, led by materialisation of our distribution TAM
estimate and rise in energy efficiency linked capex spend.
2. Gross margin expansion of 650bps+ from 32% in FY23 to c.39% by FY50E, on the
back of product mix improvement and rise in exports and service revenue.
3. EBITDA margin expansion of 1,400bps, on account of higher gross margins and
operating leverage benefit, although against a weak base.
4. Corresponding capex rise to keep fixed asset turns in-line with 3x-4.5x range
5. We assign an M&A rank of 3 to Schneider Electric Infra (denoting low likelihood of
M&A) given it is majority owned by global parent Schneider Electric (SCHN.PA) -
75% as of Dec’23).
Exhibit 90: Schneider Electric Infra - DCF snapshot

(Rs mn) FY25E FY26E FY27E FY28E FY29E FY30E FY31E FY32E FY35E FY40E FY45E FY50E
All India distribution capex 807,516 1,111,274 1,263,153 750,000 787,500 826,875 874,973 925,861 1,052,295 1,302,323 1,535,435 1,809,917
- Distribution capex growth YoY (%) 37.6 13.7 (40.6) 5.0 5.0 5.8 5.8 4.4 4.4 3.3 3.3
India distribution equipment market 668,779 920,350 1,046,135 621,145 652,202 684,812 724,647 766,792 871,504 1,078,575 1,271,637 1,498,961
- Distribution equipment market growth YoY (%) 37.6 13.7 (40.6) 5.0 5.0 5.8 5.8 4.4 4.4 3.3 3.3
Schneider India's mkt share (%) 1.9 2.1 2.3 2.5 2.7 2.9 3.1 3.3 3.9 4.9 5.1 5.4
- Market share gain YoY (bps) 15 20 20 20 20 20 20 20 20 5 5
Share of utility business in overall order inflows 57.5 60.0 65.0 55.0 50.0 49.0 47.5 46.0 44.5 42.0 40.8 39.5
Order inflow 22,554 32,045 36,842 28,111 35,077 40,378 47,127 54,828 76,166 125,554 160,371 204,508
- Order inflow growth YoY (bps) 42.1 15.0 (23.7) 24.8 15.1 16.7 16.3 11.3 10.1 5.0 5.0
Opening order book 11,697 14,559 20,898 25,360 20,339 22,950 26,351 30,694 53,287 80,857 102,604 128,577
Order inflow 22,554 32,045 36,842 28,111 35,077 40,378 47,127 54,828 76,166 125,554 160,371 204,508
Closing order book 14,559 20,898 25,360 20,339 22,950 26,351 30,694 35,715 53,530 86,290 107,395 134,056
Average order book 13,128 17,728 23,129 22,849 21,644 24,651 28,523 33,205 53,409 83,574 104,999 131,316
Execution rate (%) 150.0 145.0 140.0 145.0 150.0 150.0 150.0 150.0 151.5 154.0 156.5 159.0
- YoY change in execution rate (bps) (500) (500) 500 500 - - - 50 50 50 50
Share of service & exports in total revenue 15.6 14.5 13.9 15.0 16.7 16.5 15.7 14.9
- YoY change (bps) (108) (61) 115 170 (21) (83) (79)
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Gross margin (%) 35.0 35.2 35.3 35.5 35.7 35.9 36.0 36.2 36.6 37.4 38.1 38.9
Payment made to parent & group entities as % of
revenue 3.0 3.3 3.6 3.7 3.7 3.7 3.7 3.7 3.8 4.0 4.0 4.0
Other operating costs as % of revenue 18.3 17.0 15.9 15.8 16.1 16.2 15.9 15.7 15.2 14.5 13.7 13.0
EBITDA 3,838 5,324 6,914 7,353 7,610 8,702 10,349 12,394 17,118 27,417 36,862 49,313
EBITDA margin (%) 19.5 20.7 21.4 22.2 23.4 23.5 24.2 24.9 21.2 21.3 22.4 23.6
Depreciation 360 463 549 628 640 691 781 871 1,248 2,418 3,958 5,499
Finance cost 470 470 571 604 465 433 539 677 694 1,090 1,469 1,664
Tax 722 1,054 1,390 1,469 1,561 1,819 2,167 2,603 3,595 5,758 7,742 10,357
PAT (ex-post tax other income) 2,286 3,337 4,403 4,652 4,944 5,759 6,862 8,243 11,581 18,151 23,692 31,794
Depreciation 360 463 549 628 640 691 781 871 1,248 2,418 3,958 5,499
Capex (1,500) (1,500) (1,500) (200) (200) (1,500) (1,500) (1,500) (2,000) (5,000) (5,000) (5,000)
Working capital (757) (1,716) (3,275) (734) (114) (1,110) (1,326) (1,487) (1,498) (1,416) (1,125) (888)
Debt repayment - - 2,200 (1,500) (1,500) 800 1,500 1,500 86 1,250 641 329
FCFE 389 584 2,377 2,846 3,770 4,640 6,317 7,626 9,417 15,402 22,167 31,733 524,306
Period - - 1 2 3 4 5 6 9 14 19 24
Discount factor - 1.0 0.9 0.8 0.7 0.7 0.6 0.5 0.4 0.2 0.1 0.1 0.1
DCF - 584 2,135 2,295 2,730 3,018 3,690 4,000 3,577 3,417 2,872 2,401 39,678
CRoCI (%) 25.1 27.2 27.2 26.6 25.8 25.4 26.2 27.2 31.6 37.0 36.7 39.4
PV of FCF 112,761 CoE (%) 11.4

+ FY26 cash 197 Terminal growth (%) 5.0
Value/sh 470
We conduct a Bull case scenario analysis which assumes larger distribution capex,
higher market share gains for Schneider, larger gross and EBITDA margins expansion
due to superior product mix, lower competitive intensity and higher operating leverage.
Our bull case implied per share fair valuation suggests FY26E P/E of 40x - derived from
ascribing our base case implied P/E multiple of 35x to FY30E EPS and discounting it
18 April 2024 50
back to FY26E using GSe CoE of 13.5% (higher than our base case of 11.4% to factor
the higher risk from a longer forecast horizon). In our bear case scenario, we assume
lower distribution capex and higher competitive intensity, which would result in lower
market share gain for Schneider and inferior gross and EBITDA margins vs. our base
case.
Exhibit 91: Our Bull-case for Schneider Electric Infra factors sharper order inflow growth, larger market
share gain and higher operating leverage, whereas our Bear-case factors lower distribution capex ramp
up and materially lower margin improvement
Distribution asset base (CAGR %; FY23-30E) 10.8 12.0 7.7
Order inflow (CAGR %; FY23-30E) 14.2 19.0 5.2
Market share change (bps; FY23-30E) 143 210 105
Gross margin change (bps; FY23-30E) 385 570 150
Operating leverage change (bps; FY23-30E) 244 365 (440)
FY26E EPS 13 17 2
FY30E EPS 21 32 2
Implied P/E (x) 35 40 33
Fair value (Rs/sh) 470 695 50
Exhibit 92: Relative positioning - Indian MNC industrial companies trade at significant premium to their global parents; we estimate
Schneider Electric Infra’s CROCI to improve marginally b/w FY26-30E
35.0 ABB India
30.0
25.0 Siemens India
20.0
2a216976d69f48d9b2a05ab7ff02f49b
EV / GCI

Cummins India FY26E

Hitachi Energy India - FY30E
FY26E
5.0 ABB Schneider Elec. Global
Hitachi Energy India - Siemens
Hitachi Global FY30E
-
- 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0
(5.0)
CROCI
18 April 2024 51
Investment thesis
We believe Schneider Electric Infra has an addressable TAM of USD27bn b/w FY24-32E,
benefiting from the pick up in power distribution capex from full implementation of the
Revamped Distribution System Scheme (RDSS) over the next 5 years. Incrementally, the
company will also be a potential beneficiary of carbon tax imposition led efficiency
improvement initiatives in the future. The company is also working towards leveraging
its parent’s global technology platform to improve service offerings and benefit from the
global supply chain diversification theme.
However, despite these positives, current valuation of c.56x FY26E P/E appears
expensive, for a largely commoditised business, offering little by way of value addition.
Our reverse DCF indicates CMP is factoring c.8% terminal growth beyond 18% core
earnings CAGR b/w FY23-40E.

Valuation methodology: We derive our 12-month forward target price of Rs470/sh
(implied FY26E P/E of 35x) by forecasting 25 year free cash flows and discounting it to
FY26E by 11.4% cost of equity and ascribing 5% terminal growth. Our FCF incorporates
c.10% revenue CAGR and 685bps / 1,400bps gross / EBITDA margins expansion
respectively, between FY23-50E.
Key upside risks and what could make us change our view:
1. Sharper than expected ramp up in distribution capex, as state governments begin

receiving capital subsidy from the central government under the RDSS.
2. Privatisation of power distribution / rise in parallel distribution licensing could lead to

accelerated distribution capex spend, thereby resulting in quicker than expected
3. In our opinion, capex on energy efficiency will be sensitive to quantum of carbon tax
2a216976d69f48d9b2a05ab7ff02f49b
in future, with higher carbon taxes incentivising industries to invest more, thereby
increasing the TAM for Schneider and expediting its materialisation.
4. The low probability event of Schneider Electric Infra combining with the low voltage
unlisted businesses of Schneider India, could not only open new businesses for the
listed company (power backup, smart metering, rooftop solar, home automation
etc.), but also increase its importance in the global portfolio, significantly.
18 April 2024 52
Investment theses, price targets, risks and methodologies
Power Grid Corporation of India (PGCIL)

PGCIL is the largest beneficiary of our US$500bn+ grid capex estimate as India
undergoes its energy transition. Its large balance sheet and low cost of debt position it
well to capture the bulk of this opportunity, while its technical capabilities and execution
experience will help the company secure large, complex projects on nomination. PGCIL
has a material cost of debt advantage over its private competitors, and we believe its
strong annual free cash generation from the legacy cost plus asset base is adequate to
fund c.30% of India’s grid capex requirement in FY24-32E, without over-leveraging or
reducing its current dividend payout.
Additionally, we believe PGCIL’s long-term beta of c.0.6x is not truly reflective of its risk
profile, as its global peers have a median beta c.55% lower, resulting in a materially
higher cost of equity - which impacts PGCIL’s valuations. With comfort around earnings
stability post the recent tariff regulations (which grandfathered in legacy asset returns)
and a much larger returns-accretive asset base, we expect PGCIL’s beta to be
commensurate with its risk profile over time.
Valuation methodology: Our 12-month target price of Rs355 values the regulated
transmission business on P/B, factoring in regulated equity growth, core RoE and 10.8%
CoE (GSe of 13.5% adjusted for long-term beta of 0.6x). For valuing the competitively
won projects, we model 35 year NPVs based on levelised bid and estimated capital cost
and the consultancy & telecom businesses at 12-15x FY26E P/E.
Key downside risks: 1) delay/slower-than-expected pick-up in transmission project

awards; 2) higher competitive intensity in new project auctions; and 3) sharp rise in
bond yields.
2a216976d69f48d9b2a05ab7ff02f49b
Hitachi Energy India
We view Hitachi Energy India as a pure upstream manufacturing play on India’s energy
transition, with its technology leadership in the high-voltage equipment segment and
highly indigenized manufacturing capabilities. We expect Hitachi to be a significant
beneficiary of our US$100bn/US$500bn grid capex estimate by FY32E/50E, in addition
to the US$14bn/US$51bn non-grid related transmission equipment spend over the same
period.
Additionally, Hitachi Energy India is also expected to be a beneficiary of rising grid

digitalization (opportunity to differentiate and increase share of recurring, high-margin
service revenue), a global transmission equipment shortage (could improve export
pricing power and factory utilization) and the supply chain diversification theme
(potentially enhances India’s positioning as a global feeder factory).
Valuation methodology: We derive our 12-month forward target price of Rs8,250

to FY26E by 11.4% cost of equity and ascribing 5% terminal growth. Our FCF
incorporates c.14% revenue CAGR and 750bps / 1500bps gross / EBITDA margins
18 April 2024 53
expansion respectively, between FY23-40E.
intensity dragging margins, increase in royalty / technology usage payments to global
parent.
Schneider Electric Infrastructure Ltd.

Schneider Electric is an India-based Power Distribution company manufacturing,
designing, building and servicing advanced products/systems for electricity distribution,
such as distribution transformers, medium voltage switchgear, protection relays and
electricity distribution and automation equipment. We expect Schneider to have a TAM
of US$27bn in FY24-32E, benefiting from the pick-up in power distribution capex from
full implementation of the Revamped Distribution System Scheme (RDSS) over the next
five years. Incrementally, the company will also be a potential beneficiary of efficiency
improvements led by carbon tax imposition. The company is also working toward
leveraging its parent’s global technology platform to improve service offerings and
position the India business to benefit from global supply chain diversification.
However, despite these positives, current valuation of c.57x FY26E P/E appears rich
considering we expect company’s RoCE to remain sub-30%. Further, unlike Hitachi
Energy India, Schneider Electric Infra’s products do not entail high-end technology and
hence we expect the company to have sufficient pricing power to warrant the current
high multiples. Our reverse DCF indicates CMP is factoring in c.8% terminal growth
beyond an 18% core earnings CAGR in FY23-40E.
Valuation methodology: We derive our 12-month forward target price of Rs470

to FY26E with an 11.4% cost of equity and 5% terminal growth. Our FCF incorporates a
c.10% revenue CAGR and 685bps/1400bps gross/EBITDA margin expansion,
respectively, in FY23-50E.
2a216976d69f48d9b2a05ab7ff02f49b
Key upside risks and what could make us change our view:
1. Sharper-than-expected ramp-up in distribution capex as state governments begin

receiving capital subsidy from the central government under the RDSS.
2. Privatisation of power distribution/rise in parallel distribution licensing could lead to
accelerated distribution capex spend, thereby resulting in quicker-than-expected
3. In our opinion, capex on energy efficiency will be sensitive to the quantum of the
carbon tax in future, with higher carbon taxes incentivising industries to invest more,
thereby increasing the TAM for Schneider and expediting its materialisation.
4. The low probability event of Schneider Electric Infra, combined with the low voltage
unlisted businesses of Schneider India, could not only open new businesses for the
listed company (power backup, smart metering, rooftop solar, home automation
etc.), but also significantly increase its importance in the global portfolio.
18 April 2024 54
Disclosure Appendix
Reg AC
We, Apoorva Bahadur and Nikhil Bhandari, hereby certify that all of the views expressed in this report accurately reflect our personal views about the
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related to the specific recommendations or views expressed in this report.
Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Goldman Sachs’ Global Investment Research division.
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Disclosures
The rating(s) for Hitachi Energy India Ltd., Power Grid and Schneider Electric Infrastructure Ltd. is/are relative to the other companies in
its/their coverage universe: Hitachi Energy India Ltd., NTPC Ltd., Power Grid, SJVN Ltd., Schneider Electric Infrastructure Ltd., Tata Power
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The following disclosures relate to relationships between The Goldman Sachs Group, Inc. (with its affiliates, “Goldman Sachs”) and companies covered
2a216976d69f48d9b2a05ab7ff02f49b
by Goldman Sachs Global Investment Research and referred to in this research.
Goldman Sachs expects to receive or intends to seek compensation for investment banking services in the next 3 months: Schneider Electric
Infrastructure Ltd. (Rs794.15)
Goldman Sachs had an investment banking services client relationship during the past 12 months with: Schneider Electric Infrastructure Ltd. (Rs794.15)
There are no company-specific disclosures for: Hitachi Energy India Ltd. (Rs7,564.45) and Power Grid (Rs274.35)
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India Clean Energy Transition To Drive Multi Decade Rise in Transmission

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India Clean Energy Transition To Drive Multi Decade Rise in Transmission

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18 April 2024 | 3:06AM IST

India Clean Energy

Transition to drive multi-decade rise in transmission

We initiate on Power Grid (PGRD.BO) at Buy (12-m TP of Rs355; 29% upside).

We initiate on Hitachi Energy India (HITN.BO) at Buy (Rs8,250; 9% upside). We

We initiate on Schneider Electric Infra (SEIN.BO) at Sell (Rs470; 41% downside).

Key risks: Delayed/slower-than-expected pick-up in transmission project awards, rise

Investment theses, price targets, risks and methodologies 53

Valuation framework and GS vs. consensus

Exhibit 1: Valuation framework

Exhibit 2: Coverage earnings summary vs. consensus

Source: Bloomberg, Goldman Sachs Global Investment Research

Exhibit 3: Coverage rating and valuation summary

Source: Datastream, Goldman Sachs Global Investment Research

India RE & Utilities

European RE & Utilities

India MNC Industrials

Japan Industrial Electronics

Power Grid (PGRD.BO): Direct beneﬁciary of our transmission for transition

Regulatory overhang removed; grandfathering of legacy asset base implies

Risk-reward: Combination of steady cashﬂows from regulated business along with

Earnings & valuation: We forecast a 2% earnings CAGR in FY23-26E, driven by c.3%

Our thesis in key charts

Source: Goldman Sachs Global Investment Research

Exhibit 7: ...which will lead to creation of a capex opportunity worth

Source: CEA, Goldman Sachs Global Investment Research

14 (Total transmission capex; USD bn)

Source: CEA, Goldman Sachs Global Investment Research

450 (Rs bn) Capex Capitalisation

3,700 Nnormative Gross Fixed Assets 1,400

8.8 (%) Cost of borrowing

*for FY23 *data till 1HFY24

3.5 (x) 450

*priced as on April 16th, 2024

Source: Company data, Datastream, Goldman Sachs Global Investment Research

*priced as on April 16th, 2024

Source: Company data, Datastream, Goldman Sachs Global Investment Research

Source: Bloomberg, Data compiled by Goldman Sachs Global Investment Research

1.0 (x) (%) 30 1.0 (x) (%) 25

Earnings drivers & outlook

Exhibit 21: Key Earning Drivers

Competitive transmission business

Source: Company data, Goldman Sachs Global Investment Research

Exhibit 22: Income Statement

EBITDA 299,351 327,669 344,548 359,381 384,308 392,838 393,365 414,041

- depreciation 105,410 116,070 120,392 128,717 133,334 131,973 137,544 144,283

- Tax (8,864) 35,308 34,643 27,856 22,845 27,710 27,632 29,371

Reported PAT post minority & JV PAT

+ Adjustments (2,255) (1,287) 3,208 (32,133) (8,588) (5,590) - -

Source: Company data, Goldman Sachs Global Investment Research

Exhibit 23: GSe vs. Consensus - Power Grid consolidated ﬁnancials

(Rs mn) GSe Consensus Divergence (%)

*as on 11th Apr’24

Source: Bloomberg, Goldman Sachs Global Investment Research

Exhibit 24: GSe vs Consensus - Power Grid standalone ﬁnancials

(Rs mn) GSe Consensus Divergence (%)

*as on 11th Apr’24

Source: Bloomberg, Goldman Sachs Global Investment Research

Exhibit 25: Balance Sheet

Investment - LT 12,965 14,311 14,856 37,876 34,891 34,105 33,333 32,575

Inventory 12,473 14,335 13,669 13,572 13,400 13,538 13,646 14,397

LT debt 1,480,862 1,502,254 1,458,053 1,331,944 1,300,742 1,275,449 1,266,155 1,422,962

Source: Company data, Goldman Sachs Global Investment Research

for FY23 data till 1HFY24