Report Published as on 8th July 2024
| Ticker | GEPIL |
| Company Name | Ge Power India Ltd |
| Shariah Compliance | PASS |
| DP-Ratio | 0.26% |
We have conducted a comprehensive review on Ge Power India Ltd from a Shariah point of view and analyzed its sources of income to know whether they are complying with Shariah principles.
Ge Power India Ltd GE Power India Limited (GEPIL) is one of the leading players in the Indian power generation equipment market. With Steam Power contributing to the majority of the business, GEPIL also houses Hydro and Gas business projects. Today, with the expansion of economy, globalization, innovation, amidst political and economic challenges, GEPIL has successfully bolstered modernization and growth of Indian infrastructure.
The company has manufacturing units in Durgapur, West Bengal and Noida and several sales offices and workshops present countywide. GEPIL continues to offer a comprehensive portfolio of power generation solutions with a focus on emissions control and services portfolio supporting The Gas Power business of your Company is actively involved in supporting managing projects in the South Asia region, and gas projects globally with Engineering, Procurement and Construction services
The Gas Power Noida execution center of your Company is presently engaged in supporting Project Management, Engineering. Procurement, Construction and commissioning for GE scope in some key gas power projects in the South Asia region which are Summit Meghanghat II, Unique Meghnaghat and Shahjibazar in Bangladesh,
Moreover, the engineering team of your Company’s Gas Power business is engaged in carrying out basic and detailed engineering for global gas power projects for balance of plant equipment and Heat Recovery Steam Generator systems. Some of the key projects are Datan 869, Hsinta, Taichung, part of Taiwan power corporation megadeal project in Taiwan, Dolan Odra and Ostroleka projects in Poland; Pulau Indah in Malaysia, Tallawarra B in Australia: Orot Rabin in Israel.
In addition to the extended scope projects, the engineering team is also supporting the execution of equipment only project engineering for GE Gas Power globally.
Let’s have a look at the operating segments from which the company derives its revenue and apply the Shariah screens to them:
Segment Breakup: (In millions of INR)
For the year ended 31 ST March 2023
| Segments | Revenue | Non-Permissible Revenue | % of Non-Permissible Revenue | Non-Permissible Segment Classification | Comments |
|---|---|---|---|---|---|
| Boilers and accessories | 1,016.90 | 0 | 0 | – | – |
| Construction of industrial and non-industrial plants | 15,543.30 | 0 | 0 | – | – |
| Architectural and engineering services | 1,317.10 | 0 | 0 | – | – |
| Installation, maintenance and repair services | 4.2 | 0 | 0 | – | – |
| Other project items” | 76.6 | 0 | 0 | – | – |
| Total | 17,958 | 0 | 0 | – | – |
Tricky Areas from a Shariah perspective
As you can see in the first table, business segments are not engaged in any non-permissible activities. Hence, No tricky area found from Shariah’s point of view in this company.
Based on the above information, it is safe to assume that the business operations of Ge Power India Ltd, would be Shariah Compliant.
Let’s have a look at the non-operating income of the company
Non-operating revenue of the company: (In millions of INR)
For the year ended 31 ST March 2023
| Segments | Revenue | Non-Permissible Revenue | % Non-Permissible Revenue | Non-Permissible Classification | Comments |
|---|---|---|---|---|---|
| Interest Income | 49 | 49 | 100% | – | – |
| Gain from foreign currency transactions | 184 | 0 | 0% | – | – |
| Cross charge income | 157 | 0 | 0% | – | – |
| Income from sale of Service Exports | 115 | 0 | 0% | – | – |
| Miscellaneous income | 377 | 0 | 0% | – | – |
| Share of profit of Joint venture | 30 | 0 | 0% | – | – |
| Total | 912 | 49 | 5% | – | – |
It is clear from the table above that the non-operating income of the company includes interest income which is Shariah not compliant. This amount is included for the calculation of the Sector Compliance and Dividend Purification.
Sector Compliance Calculation:
| Total Revenue | 18,871 |
| Non-permissible operating revenue | 0 |
| Interest Income | 49 |
| % of non-permissible revenue | 0.26% |
| Sector Compliance | PASS |
Dividend Purification Calculation:
| Revenue Description | Non permissible Revenue (INR Millions) |
|---|---|
| Non-permissible operating revenue | 0 |
| Non-permissible non-operating revenue | 49 |
| Total non-permissible revenue | 49 |
| Total Revenue of The Company | 18,871 |
| Dividend Purification Ratio | 0.26% |
Financial Ratio Screen:
(All figures in INR Millions for the Year ended 31 st March 2023)
| Particulars | Amount | Remarks |
|---|---|---|
| 3 years Average Market | 13,819.84 | – |
| Total Debt | 1,626.60 | – |
| Debt Ratio | 11.77% | – |
Source: All the above information is based on the website of the company and the latest Annual Report for the period ended 31 st March, 2023.
Conclusion
Given the above information, we at Ratings Intelligence believe that Ge Power India Ltd, is a Shariah Compliant company as per the Shariah screening criteria.
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