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Motilal Oswal Report
Domestic brokerage firm Motilal Oswal has revised Hitachi Energy Ltd.'s target price to Rs 32,000 from Rs 27,000 earlier but maintained a Neutral rating, indicating a ~11% downside from the current market price of of Rs 35,995.
Hitachi Energy's results came in ahead of the brokerage's expectations for Q4 FY26, led by a beat on both revenue and profitability. For FY26, revenue/Ebitda/PAT grew by 28%/111%/203% YoY.
Order inflows for the full year stood at Rs 18,500 crore, up 2% YoY. Excluding exports, which accounted for nearly 25% of total inflows, domestic order inflows (base + HVDC) stood largely flat in FY26.
The brokerage expects base ordering to start ramping up from domestic markets, driven by strong opportunities from transmission, renewable, data center and exports.
The company is also expanding its capacities by another Rs 2,000 crore, potentially adding 30,000-40,000 MVA by Q4 CY28. This capex is over and above the existing Rs 2,000 crore capex, which is being done in phases.
On the earnings front, the brokerage has raised EPS estimates by 8%/6% for FY27/FY28, factoring in improved profitability trajectory.
However, despite strong fundamentals and growth prospects, valuations remain rich. The stock is currently trading at elevated multiples of ~110x FY27 and 75x FY28 earnings, limiting upside potential.
Hence Motilal Oswal has revised Hitachi Energy's target price of Rs 32,000 based on 60 times Jun'28E earnings per share. The stock is currently trading at 110x/75x/54x P/E on FY27/28/29.
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