Hitachi Energy jumps 7% after Q1 results. Here's why Nomura initiated coverage on stock

Shares of Hitachi Energy India jumped over 7% to Rs 35,110.40 on the BSE on Monday, after reporting a 123.5% year-on-year (YoY) jump in its profit after tax to Rs 294.2 crore for the June quarter of FY26. Following the company’s Q1 results, released on Friday in a regulatory filing on the BSE, domestic brokerage firm Nomura initiated coverage on the stock with a Buy rating and set a target price of Rs 40,030 on Monday.

Implying a 23% upside, the brokerage expects EBITDA, revenue and PAT CAGRs of 38%, 48% and 45%, respectively, over FY26-29F. The growth outlook is supported by a robust existing order book, healthy order inflows across HVDC and ex-HVDC segments, rising T&D equipment demand driven by renewable energy capex and emerging segments such as data centres, along with margin expansion from better operating leverage.

The company reported a 68.6% YoY jump in Q1 revenue from operations to Rs 1478.9 crore, driven by strong and timely execution of its order backlog across all businesses.

Confluence of multiple structural themes results in robust growth prospects

As a leader in HVDC technology, the company, in the brokerage’s view, is well positioned to benefit from opportunities arising from upgrades to maturing HVDC stations over the longer term.

The brokerage believes that the company is positioned to benefit from five key tailwinds, including lifecycle service orders for grid automation, expansion of transport infrastructure, multi-fold growth in data centres, energy storage solutions, and the target of ordering one HVDC project per year to enable grid integration.

Nomura also expects Hitachi Energy India to win two domestic HVDC projects over FY26-29F.

Company Outlook

As per the company’s statement on the BSE, the new fiscal year brings increased opportunities in emerging segments such as AI data centres, smart grids, BESS and electric vehicle infrastructure. With the new target of 900 GW of non-fossil fuel installed capacity by FY36, opportunities in the renewable energy segment are expected to grow manifold, creating the need for a robust energy manufacturing ecosystem to meet the nation’s growing energy requirements.

To deliver on this ambitious target, the company said closer collaboration among all stakeholders and a level-playing-field policy would be essential to ensure equal opportunities for both domestic and global players. It added that a swift resolution to ongoing geopolitical tensions is crucial for global economic growth, as prolonged uncertainty could hinder the pace of the energy transition worldwide.

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