Hitachi Energy India Ltd., a global market leader, is in the catbird seat to benefit from this rising investment. It has already begun reaping benefits – we estimate the order book as of FY25E at ~Rs 290 billion (book to bill of ~4.5x). In the brokerage's view, order outlook remains strong for the next four-five years. Its margins are set to improve on the back of operating leverage and better pricing environment.
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ICICI Securities Report
The grid is set for an upgrade; an upgrade that would pave the way to integrate and increase the share of renewables. This improves the total addressable market for high voltage equipment. Total inter-state transmission capex (Rs 3.4 trillion) over the next six years is likely to double the existing stock.
We also expect demand for HV equipment in the next decade to be 2.5x that of the earlier decade, while the demand for HVDC is likely to be 5x.
Hitachi Energy India Ltd., a global market leader, is in the catbird seat to benefit from this rising investment. It has already begun reaping benefits – we estimate the order book as of FY25E at ~Rs 290 billion (book to bill of ~4.5x).
In our view, order outlook remains strong for the next four-five years. Its margins are set to improve on the back of operating leverage and better pricing environment.
We expect its revenues/Ebitda/profit to grow at 38%/72%/96% CAGRs over FY24–27E. Initiate coverage with Buy and a target price of Rs 16,617.
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