Hitachi Energy gets 'Buy' from Ambit on multi-year revenue visibility

The brokerage has set a target price of ₹28,500 for Hitachi Energy India in its coverage initiation report, which implies an upside potential of 12.4 per cent

Ambit Institutional Equities has initiated coverage on Hitachi Energy India with a 'Buy' rating, citing the company's multi-year revenue visibility due to a strong order book, after recent order wins, export growth, and future opportunities.

 

The brokerage has set a target price of ₹28,500 for Hitachi Energy India, which implies an upside potential of 12.4 per cent from the current level. The stock is trading at price-to-earnings (P/E) of 83 times and 57 times financial year 2027 and 2028 earnings-per-share (EPS) estimates, respectively. In comparison, 95 times and 65 times P/Es implied for the same period by the current target price.

 

 

Hitachi Energy India is still in the upcycle for exports and high voltage direct current (HVDC), the brokerage said.The current 12-month forward P/E multiple is 84 times, which is near its average multiple since its available data.    Going forward, Ambit Institutional Equities forecasted compound annual growth rates (CAGR) of 35 per cent for sales and 38 per cent for earnings before interest, taxes, depreciation, and amortisation (Ebitda) for the period from financial year 2026 to 2029. During the same period, the brokerage estimated EPS CAGR of 32 per cent.

 

As of 12:26 PM, Hitachi Energy's share price was trading 1.44 per cent higher at ₹25,347. The stock was seen outperforming the Nifty 50 index, which was trading 0.17 per cent down. 

 

High backlog and future opportunities

Hitachi Energy India already has five high-voltage direct current (HVDC) projects in the pipeline, totalling 19.5 gigawatt (Gw). With these recent order win, the company has a high backlog, Ambit Institutional Equities said. 

 

In the next two years, further opportunity for HVDC tenders may arise as the National Electricity Plan targets a capacity of 67 Gw by 2032 from 33.5 Gw at present. This will likely provide ₹30,000–₹40,000 crore market opportunity for equipment players, the brokerage said.  

 

In the base case, Hitachi Energy India can secure  ₹10,000-crore orders every year from the financial year 2027 to 2029, and continue to be the market leader, Ambit Institutional Equities said. 

 

Additionally, the data centre opportunity provides future revenue visibility for the company. 

 

Hitachi Energy India is the strongest transmission and distribution player in India and a leader in HVDC, with over 60 per cent market share in already executed and awarded projects, the brokerage said.   CHECK Stock Market LIVE Updates 

Export growth

Meanwhile, Hitachi Energy India's export growth could outperform the domestic market, excluding the HVDC segment, according to Ambit Institutional Equities, due to the company's constant efforts to enhance capabilities , diciplined export strategy, and expanding presence in the overseas markets.   The brokerage estimated a 12 per cent CAGR in export orders, with the contribution reaching 30 per cent by the financial year 2028. 

 

Ambit Institutional Equities also expects an acceleration in the services business of Hitachi Energy. The company launched it as a separate segment to tap in to extensive installed base, with a comprehensive portfolio of services ranging from digitised classic services to advanced service solutions.The segment may form more than 10 per cent of total orders by financial year 2028, compared to 6–7 per cent at present. 

 

Hitachi Energy India, the brokerage believes, will experience this growth in the backdrop of India's contribution in the global market rising with a focus on localisation. The country has a low-cost base with no quality difference. 

 

Operating leverage at play

Hitachi Energy India's operating leverage was muted in the financial year 2025, following strong levels in the financial year 2024, as expenses increased. However, in the September and December quarters (Q2FY26 and Q3FY26), the company posted record Ebitda margins, reflecting operating leverage, Ambit Institutional Equities.

 

The company could maintain an Ebitda margin of 15– 17 per cent in the period between financial years 2026 and 2028, compared to 9.3 per cent in the financial year 2025, the brokerage said. 

 

That said, one of the key risks for Hitachi Energy India's growth could be deferral of the capex plan and delays in HVDC tenders, Ambit Institutional Equities cautioned.  

 

==========

 

Disclaimer: The views and investment tips expressed by the analysts in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.