In a high-conviction call that aligns with India’s sweeping energy transformation, ICICI Securities has initiated coverage on Hitachi Energy India with a ‘BUY’ rating and a target price of INR 16,617 per share, implying a robust 31% upside from its current levels of INR 12,729 per share. This endorsement is a vote of confidence in India’s grid modernisation agenda and Hitachi Energy’s critical role in enabling it.
This report comes at a time when India’s focus on energy security, renewable integration, and infrastructure modernization has reached an inflection point. And standing tall in the eye of this structural shift is Hitachi Energy—a global leader with a deep legacy in high-voltage power systems.
India – A USD 40 Billion Opportunity
India currently transmits about 450 GW of electricity—this needs to double to 900 GW by FY32, driven by the twin pressures of surging electricity demand and a massive shift to renewables. The government aims for 43% of power consumption to come from renewables by 2030, up from 14% today.
To enable this, a whopping INR 3.4 lakh crore has been earmarked for inter-state transmission capex over the next six years. This is no ordinary capex cycle. It’s a fundamental revamp—comprising high-voltage (HV) substations, gas-insulated switchgear (GIS), HVDC lines, STATCOMs, and grid automation systems.
This is where Hitachi Energy fits in like a glove.
Deep Roots With ABB India
Once the power grid division of ABB India, Hitachi Energy was spun off and rebranded after the Japanese conglomerate acquired an 80% stake in 2020. Since then, the company has quietly but assertively entrenched itself as India’s most dominant player in HVDC technology, with a market share of over 80%.
In FY25 alone, it secured two marquee HVDC orders—the Khavda–Nagpur and Bhadla–Fatehpur projects—with a combined equipment value pegged at INR 20,000 crore. These wins catapulted the company’s order inflow to INR 27,700 crore, taking its order book to an estimated INR 28,700 crore, a 4.5x book-to-bill ratio.
It’s not just HVDC. Hitachi is a full-spectrum player: transformers, reactors, SCADA, STATCOMs, and grid automation systems—across utilities, railways, metros, and data centres.
Financials at a Glance
ICICI Securities forecasts a revenue CAGR of 38% and an EBITDA CAGR of 72% from FY24 to FY27. But it’s the bottom line that steals the show: Net profit is expected to grow at a blistering 96% CAGR, rising from INR 160 crore in FY24 to INR 1,235 crore by FY27.
Margins are finally catching up. After years of subdued profitability due to legacy orders and demerger costs, EBITDA margins are set to expand from 6.7% in FY24 to 13% in FY27, aided by:
- Operating leverage from scale
- Improved pricing power due to tight supply in HV equipment
- Increasing share of exports and services (targeting 25% of revenues)
Hitachi Energy Stock Performance
In May 2020, shares of Hitachi Energy were trading around INR 790 per share. The stock made an all-time high of INR 15,899.20 per share on 11 October 2024, reflecting a multibagger 21X returns over the investment in four years. Hitachi Energy is following an upward trajectory since its listing. Following the news, shares of Hitachi Energy surges 5% intraday on 17 April’s trading session and closed at INR 13,206 per share.
Diverse Approach: Railways, Data Centres, Exports
Hitachi Energy is not only limited to grids, it is diversifying business. The company is strategically positioned in India’s mobility and digital infrastructure story.
🛤 Railways Electrification & High-Speed Rail
The Indian Railways is moving fast—both in modernization and Revenue, it is focusing toward electrification and speed upgrades. Hitachi recently supplied India’s first 100 MVA Scott transformers, critical for high-speed operations. It has also bid for the Mumbai–Ahmedabad High-Speed Rail electrification, via consortium with L&T and Sojitz.
🏢 Data Centre Electrification
India’s data centre capacity is expected to quadruple to 4,000 MW in the next 5–7 years. Hitachi Energy already supplies power quality solutions, transformers, and substation automation systems to tech giants—including Microsoft, which awarded major orders for its Pune and Hyderabad campuses.
🌍 Exports as a Growth Lever
Indian factories (Vadodara, Bengaluru, Chennai) have been integrated into Hitachi Energy Global’s feeder factory network. The company has begun exporting HVDC components for Australia’s Marinus Link. Exports already form 25% of order inflows, and that figure is expected to climb.
Margin Re-rating Underway
While industry peers like Siemens and GE T&D enjoy double-digit EBITDA margins, Hitachi Energy’s turnaround is now visible. Its global parent has lifted EBITDA margins from 6.1% in FY21 to 11.4% in recent quarters, and Hitachi Energy India has already hit double-digit margins (10.3%) in Q3FY25.
Valuation: Leadership at a Premium, But Justified
At the current price of INR 12,729, Hitachi Energy trades at 46x FY27E EPS. ICICI Securities believes this premium is justified, given its market dominance, long-term growth visibility, and strong ROIC trajectory.
The report assigns a 60x multiple on FY27E EPS of INR 277, arriving at the target price of INR 16,617 per share.
⚠️ Risks
As with any capital goods story, execution risks loom large. Delays in HVDC project awards, railway electrification, or industrial capex could impact order inflows and revenue timing. Margin expansion, while underway, remains vulnerable to input cost volatility and competition from multinationals like Siemens and GE T&D.
However, with a robust order book, industry tailwinds, and policy support, these risks are considered manageable.
Bottom Line
Hitachi Energy isn’t just another capital goods play—it’s a strategic enabler of India’s clean energy ambition, digital infrastructure growth, and electrified transportation. With an enviable order pipeline, deep technological moat, and global export ambitions, the company is perfectly positioned to ride the next decade of infrastructure supercycle.
As ICICI Securities puts it: “We initiate with a BUY rating and a TP of INR 16,617. Hitachi Energy is not just participating in India’s energy transition—it’s leading it.”
📌 Quick Snapshot
| Metric | FY24 | FY27E |
|---|---|---|
| Revenue | 5,237.50 | 13,653 |
| EBITDA Margin | 6.7% | 13.0% |
| Net Profit | 163.80 | 1,235 |
| EPS (INR) | 38.6 | 277.0 |
| P/E | 325.5x | 45.4x |
| Target Price (INR) | – | 16,617 |
| Upside | – | 31% |
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Disclaimer: This article is for information purpose. Please consult a financial advisor before making any investment decisions.