Hitachi Energy Hopes Green Transition, Strong Order Book To Sustain 2024's Multibagger Rally
Hitachi Energy shares have rallied over 160% so far this year, having hit a peak in mid October.
Hitachi Energy India Ltd., one of the multibaggers of 2024, expects to benefit from the country's accelerating energy transition to renewable sources that will lead to demand for advanced transmission equipment and upgradation.
"India's energy transition is driving tailwinds. The National Energy Plan lays investment of Rs 9 lakh crore till fiscal 2032. A lot of this will go to transmission lines that require high voltage distribution cables," N Venu, managing director and chief executive officer of Hitachi's India and South Asia business, told NDTV Profit in a televised interview.
He emphasised that nationwide electricity grid needs to be robust and modernised which requires sophisticated equipments the company produces. States are also looking at upgrading their grids to make them efficient, he said.
Venu said the company has added four greenfield factories in the last two years, noting that seven out of 15 HVDC links in India run on Hitachi technology. "We have localised our product portfolio and scaled up engineering capabilities."
He also said energy demand from data centres is evolving, sharing that a query on generative AI platform ChatGPT requires eight to ten times more power than a Google search.
Likewise, power demand will increase as more electric vehicles hit Indian roads and industries like steel and cement double down on decarbonisation targets.
Order Book, Capex Plans
Hitachi Energy is composed of four business units that are grid automation, grid integration, high voltage products and transformers. The company's order book rose nearly 12% to Rs 1,952 crore in the September quarter, of which exports account for around 22%.
A backlog of Rs Rs 8,910 crore provides 26 months of earnings visibility, as per the management.
The company has announced capital expenditure plan of Rs 2,000 crore to be spread over the next four to five years. This investment will be directed towards expanding its offerings across transmission and distribution (T&D), data centers, and railways.
Hitachi Energy also anticipates investments in green hydrogen and power transmission. It has maintained its guidance for double-digit margins by the end of the year and is co-bidding on several HVDC projects, expecting at least one to be finalized.
