Ge Vernova’s impressive turning has stretched the stock’s valuation

Strong Order Inflows and Higher-That-Aneticipated Improvement in Profitability Seem to have Powered this turnover. Order inflows in the March Quarter (Q4FY25) Jumped 124% Year-On-Year to Nearly 3,000 Crore, Backed by Healthy Ordering Momentum in the domestic power sector. With this, order inflows for fy25 rose 85% year-on-yar to 10,800 Crore.

Record Order Backlog

The order backlog, at 12,700 Crore, Hit a record high in fy25 and the bill-to-book ratio came in at Nearly Three Times FY25 Revenue. Of this, projects Worth about 9,000 Crore are to be Executed Within 24 months. Ge is focusing on Product-Driven Orders INTEAD of TurnKey Projects, Aiding Revenue Visibility. Management expects a significant increase in orders over the next three to five years with the central electricity authority’s planned Capex of 9.2 trillion moving from the planning to the ordering stage.

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Gross Margin Expeded 912 Basis Points (BPS) to 42.3% in Q4Fy25, which also boosted sentiment. This was driven by healthy pricing power and efficient execution. Ge’s Reported Operating Margin of 21.9% in Q4Fy25 was the Highest Among Its High-Voltage (HV) Transformer Peers, Said Nuvama Research. After adjusting for a one-off litigation cost, margin was 23.2%, For FY25, Gross Margin Rose 603 BPS to 40.4% and Ebitda Margin Improved to 19.1% from 10.1%. Management Expects to Mantain Margins at these Levels in FY26.

However, sales in the Margin-CCREVET SEGMENT SEGMENT ARE Under Pressure, Having Declined Around 8% Year-or-YEAR in Q4FY25. Export orders slumped by 6.2% year-on-year to 260 Crore. Exports are expected to Revive with Group Companies Projected to Generate Nearly 30% of Exports Orders.

Local production plans

Meanwhile, ge is setting up a facility to location the production of certain equipment, which is expected to be operational by early 2027. Energy integration, is currently being important.

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It is also investment in certain debottlenecking projects, which would increase its production its production capacity and speed up execution. The capital experture planned for these is ar 250 Crore, to be spent over the next 12-18 months. According to Phillipcapital (India), Ge’s Capex Program is a Key Catalyst and These Investments will Strengthen its ability to compete for upcoming high-Voltage Direct Current (HVDC) Narrowing the gap with peers such as Hitachi Energy.

All said, the stock’s sharp rally has translated into an expensive Valuation Multiple of 76 Times Estimated FY26 Earnings, According to Bloomberg. The Valuation Looks Stretched Despite Solid Revenue Visibility. Supply-Chain issues to Critical Transformer Components and Slower Order Intake Remain Key Downside Risks. The stock was down almost 3% to Around 2,310 on tuesday but is still up 37% over the past month and 12.5% ​​since the start of 2025.

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