Hitachi Energy India: Are the valuations justified and where does the order book stand?

Synopsis: Hitachi Energy India Ltd shows strong financial momentum with FY23–FY25 revenues rising from Rs. 4,469 cr to Rs. 6,385 cr, net profit surging from Rs. 94 cr to Rs. 384 cr, and a record order backlog of Rs. 29,412.6 cr, supporting justified valuations.

The valuations of Hitachi Energy India Ltd appear justified due to its strong financial momentum, improving profitability, and robust future visibility. The company has consistently expanded its operating margins over FY23–FY25, driven by rising efficiency, higher-margin orders, and strong execution. Net profits have grown sharply over the same period, reflecting better capital discipline and scalability. Revenue growth has remained steady, supported by rising demand for grid modernisation, renewable energy integration, and data-centre power infrastructure.

With a market capitalisation of Rs. 82,860 cr, the shares of Hitachi Energy Ltd closed at Rs. 18,590 per share, from its previous close of Rs. 18,169.10 per share. The stock has surged 1,317% in five years, gained 42% over the past year, and is up 20% year-to-date.

The company has shown consistent improvement across key financial metrics over FY23–FY25. Operating profit expanded steadily from Rs. 250 crore in FY23 to Rs. 359 crore in FY24 and further to Rs. 605 crore in FY25, reflecting strong margin enhancement. 

Net profit also rose sharply, increasing from Rs. 94 crore to Rs. 164 crore and then more than doubling to Rs. 384 crore, highlighting better operational efficiency and profitability. Sales demonstrated healthy growth, moving from Rs. 4,469 crore in FY23 to Rs. 5,237 crore in FY24 and reaching Rs. 6,385 crore in FY25. 

Meanwhile, borrowings declined significantly from Rs. 334 crore to Rs. 214 crore and further to Rs. 88 crore, indicating improved financial discipline and a stronger balance sheet.

Strong Order Book

Hitachi Energy India reported strong operational momentum in Q2FY26, supported by a solid order book and efficient execution. Orders rose 13.6% YoY to Rs. 2,217 crore and jumped 28% QoQ, reflecting sustained demand across transmission, renewable, industrial, and rail segments.

For H1FY26, the company reported outstanding year-on-year performance, with orders rising 208.9% to Rs. 13,556 crore, led by strong traction in HVDC, solar, wind, and industrial grid solutions. The company also highlighted its highest-ever order backlog of Rs. 29,412.6 crore, ensuring strong revenue visibility over the coming quarters.

Commissioning Momentum Across Key Sectors

Hitachi Energy India continued strengthening its project execution by commissioning multiple high-impact installations across renewables, data centres, and industrial sectors. These included a 220/33 kV AIS package for Ambuja Cement in Rajasthan, 220 kV GIS substation commissioning for Adani Connex’s data centre in Pune, and a 150 MW EBOS solar plant for Blupine Energy in Jodhpur. Each project involved comprehensive design engineering, manufacturing, testing, and on-site execution, reflecting the company’s strong technical capabilities.

Additionally, the company completed a 220 kV AIS substation installation for Tata Power Renewables to support 200 MW wind power evacuation. These projects showcased Hitachi Energy’s integrated approach, covering procurement, construction, installation, and commissioning, along with advanced BIM modelling and equipment supply. 

Capex Progress and Capacity Expansion Strategy

Hitachi Energy India outlined a clear capex roadmap, with planned investments of around Rs. 750 crore for FY26 and Rs. 720 crore for FY27, although only Rs. 67 crore was spent in H1FY26 due to a slower start. 

Management reiterated confidence that full-year spending will still come close to planned levels, supported by multiple capex projects currently underway across various stages of execution. These projects are expected to start contributing meaningfully from the second half of next year. 

The company also emphasised that it is not capacity-constrained for HVDC or large-scale projects, backed by an ongoing capex program of nearly Rs. 2,000 crore across major locations such as Chennai, Bengaluru, Mysore, and Baroda to meet future requirements. Incremental capacity additions vary by product line, with some expected to increase by 40–50%, ensuring strong readiness for rising demand.

Brokerage Commentary 

BNP Paribas upgraded its rating on Hitachi Energy India Ltd to ACCUMULATE with a revised target price of Rs. 24,504, upside of 32% valuing the company at 85x FY27E adjusted EPS, reflecting strong growth visibility. The company achieved a record-high order backlog of Rs. 29,412.6 crore, marking a major milestone. Export orders grew 59% YoY, supported by strong traction across European utilities, Southeast Asian data centres, and renewable projects in the Middle East and North America. The order mix also shifted meaningfully, with products contributing 64% versus 74% last year, projects rising to 24% versus 19%, and services increasing to 12% versus 7%, indicating broad-based and improving business diversification.

In H1FY26, revenue grew 19.2% YoY to Rs. 3,435.36 crore, driven by a robust order book and solid execution. The company secured total orders worth Rs. 13,556.3 crore during the period, underscoring sustained demand across sectors. Key renewable energy achievements included commissioning a 150 MW energy balance optimisation system in Rajasthan and setting up a 220 kV AIS substation for a 200 MW wind project in Tamil Nadu, reinforcing its strong positioning in India’s energy transition and grid modernisation initiatives.

About the company 

Hitachi Energy India Ltd is a leading provider of power grid and energy technology solutions, focusing on transmission, distribution, and sustainable energy infrastructure. The company offers advanced transformers, high-voltage products, and digital grid systems, supporting India’s transition toward reliable, efficient, and renewable power networks.

The company delivers a ROCE of 19.4% and a ROE of 13.8%, supported by a very low debt-to-equity ratio of just 0.02, indicating strong returns and a highly conservative balance sheet.

YoY Financial Performance

Hitachi Energy delivered strong year-on-year growth, with sales rising 18% to Rs. 1,833 crore in Q2FY26 compared to Rs. 1,554 crore last year. Profitability surged sharply as EBITDA jumped 172% to Rs. 299 crore, and net profit increased 406% to Rs. 264 crore. EPS also improved significantly, rising 381% to Rs. 59.31, reflecting robust operational efficiency and stronger margins.

QoQ Financial Performance

On a quarter-on-quarter basis, the company showed consistent momentum. Sales grew from Rs. 1,479 crore in Q1FY26 to Rs. 1,833 crore in Q2FY26. EBITDA nearly doubled from Rs. 155 crore to Rs. 299 crore, while net profit rose from Rs. 132 crore to Rs. 264 crore. EPS also strengthened quarter-to-quarter, increasing from Rs. 29.52 to Rs. 59.31, indicating accelerating earnings traction.

In conclusion, the valuations of Hitachi Energy India Ltd are well justified, supported by strong revenue and profit growth, robust order book, and efficient project execution across key sectors. 

With improving operating margins, disciplined capital management, and strategic capacity expansions, the company is well-positioned to capitalise on the growing demand for grid modernisation, renewable integration, and industrial energy solutions. Positive brokerage outlooks, export growth, and broadening business diversification further reinforce the stock’s strong growth visibility and long-term investment potential.

Written by Manideep Appana

Disclaimer

The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post Hitachi Energy India: Are the valuations justified and where does the order book stand? appeared first on Trade Brains.