Citi initiates coverage on 4 Indian power equipment stocks; sees up to 33% upside. Own any?

Citi Research has initiated coverage on the shares of four Indian electrical equipment-makers, as it sees India uniquely positioned to benefit from a large domestic transmission buildout, accelerating HVDC adoption, favourable localisation policies and export opportunities.

Citi initiated ‘Buy’ calls on the shares of Hitachi Energy India (Power India), GE Vernova T&D India as well as CG Power and Industrial Solutions, along with a ‘Neutral’ rating on Siemens Energy. It highlighted that the Central Electricity Authority’s (CEA) approximately Rs 7.9 lakh crore transmission plan for 900 GW renewable integration by FY36 points to a multi-year buildout of HV and HVDC infrastructure. “We estimate HVDC alone represents a Rs 1.6 lakh crore OEM opportunity, with meaningful barriers to entry supported by localisation norms and certification requirements,” it said.

Accelerating renewable adoption, electrification and data-center growth are meanwhile driving a $15 trillion global T&D capex cycle over 2025-2050, Citi said. As renewables could make up approximately 80% of future capacity additions (BNEF), it added that higher transmission and grid-stabilization requirements should sustain investment demand. Persistent transformer shortages & increasing global HVDC sourcing likely position Indian T&D OEMs as key beneficiaries, it further said.

Citi on Hitachi Energy India

Hitachi Energy India remained Citi’s top pick among the pack, as it highlighted that it has a higher probability of near-term HVDC wins, expanding capacity to capture market share and significant long-term growth visibility. “Thus, we value it at a premium to the broader cap goods companies given higher growth expectation,” it said, while assigning a target price of Rs 46,700 apiece for the shares of Hitachi Energy India. This implies an upside potential of nearly 33% from the stock’s previous closing price of Rs 35,190 per share on NSE.

Citi on GE Vernova T&D India
For GE Vernova T&D India, Citi kept a target price of Rs 6,200 per share, implying an upside potential of nearly 25% from the stock’s previous closing price. It said that the firm has strong HVDC and export exposure, with medium-term growth being supported by capacity expansion and parent’s global platform.

Citi on CG Power
Citi kept a target price of Rs 1,100 apiece for the shares of CG Power and Industrial Solutions, implying an upside potential of more than 21% from the stock’s previous closing price. It highlighted the firm’s diversified exposure to transmission, railways, industrials and semiconductors, supported by aggressive capacity addition, though increasing competition in motors and railways is limiting margin upside in the segment.

Citi on Siemens Energy
Siemens Energy is the only stock on the list that received a ‘Neutral’ rating from Citi, with a target price of Rs 4,000 apiece, implying an upside potential of more than 8.5% from the stock’s previous closing price of Rs 3,686.60 apiece on NSE.

The shares of Siemens Energy gained more than 1%, while those of CG Power were up around 4%, as seen at 1.50 pm on Thursday. GE Vernova T&D India shares jumped over 2% while Hitachi Energy India shares rallied around 5%.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)