Hitachi Energy emerges as potential ‘buy’ on strong order inflows, earnings visibility

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The company's June quarter performance was benefited from higher execution, with revenue rising 69% year-on-year. The near-term pipeline may receive another boost from high-voltage direct current (HVDC) projects. Hitachi Energy is currently bidding for a greenfield HVDC project. The order is expected to be awarded within six months.
Beyond transmission, BESS presents another growth avenue. During the quarter, the company secured its first BESS order, a 165 MW/330 MWh project in Andhra Pradesh.
Margins may benefit over the long term from capacity expansion and localisation. Hitachi Energy began the construction of its 20th manufacturing facility at Karjan in Vadodara in June. The fully digital manufacturing facility is targeted for commissioning in December 2028 and is expected to expand capacity and strengthen local capabilities.
Data centres are emerging as an important new demand driver. The company secured multiple data centre orders during the quarter and is positioning the portfolio across gas-insulated switchgear, transformers, dry transformers, power transformers and services.
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The stock trades at price-to-earnings (P/E) multiple of 127. Though it is below the three and five-year average of 217 and 285, it still appears on the higher side, reflecting strong future growth prospects. Analysts have revised price targets by 6-11% citing stronger growth visibility. ICICI Securities has upgraded the stock to 'Buy' from 'Add' with a revised target price of ₹40,000 valuing the stock at 70 times its FY28 earnings. PL Capital has upgraded the stock to 'Hold' from 'Reduce' with a revised price target of ₹34,026.
Shares of Hitachi Energy ended nearly 2% lower at ₹32,200 on the Bombay Stock Exchange on Wednesday.
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