How has been the historical performance of GE Power?

Revenue and Operating Performance Trends

GE Power's net sales peaked in the fiscal year ending March 2021 at over ₹3,300 crores, reflecting a robust business phase. However, subsequent years witnessed a sharp contraction, with revenues dropping to just above ₹1,000 crores by March 2025. This decline of nearly two-thirds over four years signals considerable challenges in maintaining sales momentum.

Operating income mirrored this trend, with total expenditure excluding depreciation consistently exceeding revenues from 2022 onwards. The operating profit before depreciation and interest (PBDIT) excluding other income turned negative from March 2022 through March 2024, indicating operational stress. Despite this, other income provided some relief, enabling the company to report a positive operating profit in March 2025.

Margins have been under pressure, with operating profit margins (excluding other income) falling from a healthy 4.5% in 2021 to negative territory in the following years, before slightly improving to just below zero in 2025. Similarly, the gross profit margin declined sharply, reflecting rising costs and reduced pricing power.

Profitability and Earnings Analysis

The company’s profit before tax (PBT) and profit after tax (PAT) have exhibited significant volatility. After a positive PBT of ₹99 crores in 2021, GE Power experienced consecutive years of losses, with PBT plunging to negative ₹334 crores in 2023. The fiscal year ending March 2025 showed a modest recovery with a positive PBT of ₹22 crores.

Correspondingly, PAT followed a similar pattern, swinging from a profit of ₹70 crores in 2021 to a substantial loss of over ₹440 crores in 2023, before narrowing losses in 2024 and a slight negative PAT in 2025. Earnings per share (EPS) reflected these swings, moving from positive double digits in 2021 and 2020 to deeply negative figures in the subsequent years, before recovering to a positive EPS of approximately ₹30 in 2025.

Exceptional items have also influenced profitability, notably a large positive adjustment in 2025, which contributed to the improved bottom line. Interest costs have generally declined since 2022, easing financial burdens somewhat.

Balance Sheet and Asset-Liability Position

GE Power’s total assets have contracted from nearly ₹3,900 crores in 2021 to just over ₹2,000 crores in 2025, reflecting asset sales or write-downs. Shareholders’ funds have similarly decreased, though a notable increase in reserves in 2025 has bolstered net worth to over ₹300 crores.

The company has successfully reduced its debt levels, with total debt falling to zero by March 2025 after peaking above ₹300 crores in 2021. This deleveraging improves financial stability and reduces interest expenses.

Current liabilities have decreased but remain substantial, with trade payables and other current liabilities constituting a significant portion of total liabilities. Net current assets have fluctuated, turning positive again in 2025 after a negative position in 2024.

Cash Flow and Liquidity

Cash flow from operating activities has shown a marked improvement, turning positive in 2023 and rising to ₹319 crores in 2025, signalling better operational cash generation. Investing activities have been relatively stable, with modest inflows and outflows. Financing activities have generally been negative in recent years, consistent with debt repayments and reduced borrowings.

Closing cash and cash equivalents surged to ₹438 crores in 2025, a significant increase from ₹130 crores in 2024, enhancing liquidity and providing a buffer for future operations.

Summary of Historical Performance

In summary, GE Power’s historical performance over the past six years has been characterised by a peak in revenues and profits around 2021, followed by a steep decline in sales and profitability. The company faced operational challenges that led to negative operating margins and net losses in the subsequent years. However, recent financials indicate a tentative recovery with improved operating profit, reduced debt, and stronger cash flows.

Investors should note the volatility in earnings and margins, alongside the company’s efforts to strengthen its balance sheet and liquidity position. While the turnaround signs in 2025 are encouraging, sustained improvement will depend on stabilising revenues and controlling costs in a competitive sector.

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