Citi bets on electric equipment makers; picks Hitachi, GE Vernova, CG Power

Analysts at Citi are bullish on India's electric equipment manufacturers, saying the country is uniquely positioned to benefit from a large domestic transmission buildout, accelerating high-voltage direct current (HVDC) adoption, favourable policies, and export opportunities. Notably, India manufactures around 80 per cent of the global transmission and distribution products.

 

Citi has initiated 'Buy' coverage on Hitachi Energy, GE Vernova T&D India (GVTD), and CG Power for ₹46,700, ₹6,200, and ₹1,100 targets, respectively. It has maintained a 'Neutral' stance on Siemens Energy for a target price of ₹4,000.

 

Citi estimates that HVDC-related investments represent an opportunity of around ₹1.6 trillion as India works toward integrating 900 GW of renewable energy capacity by FY36.

 

 

"The Central Electricity Authority's (CEA) around ₹7.9 trillion transmission plan of 900 GW renewable integration by FY36 points to a multi-year buildout of HV and HVDC infrastructure. We estimate HVDC alone represents a ₹1.6 trillion OEM opportunity, with meaningful barriers to entry supported by localisation norms and certification requirements," the brokerage said.

 

The report noted that transmission networks are becoming a critical link in the energy transition. It said that accelerating renewable adoption, electrification, and data-centre growth are driving a US $15 trillion global T&D capax cycle over CY25-50.  Check - TOP GAINERS NSE | TOP LOSERS NSE

 

"As renewables could make up around 80 per cent of future capacity additions, higher transmission and grid stabilisation requirements should sustain investment demand. Persistent transformer shortages and increasing global HVDC sourcing likely position Indian T&D OEMs as key beneficiaries," the brokerage said.

 

The report also highlighted that increasing localisation requirements and certification norms could act as entry barriers, benefiting established domestic players.

 

Key risks include slower-than-expected capex, HVDC rollout delays, rising competition, easing localisation norms, inflation, and a change in sentiment impacting valuations.   ========================================== 

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