Goldman Sachs bullish on Hitachi Energy amid strong order pipeline and market prospects

Hitachi Energy saw a surge in its stock price on Wednesday, March 5, following a bullish report from brokerage firm Goldman Sachs. The brokerage firm cited a strong order pipeline, particularly in high-voltage direct current (HVDC) projects, as a key driver of future growth.

Goldman Sachs highlighted that three planned HVDC lines are expected to be ordered over the next one to two years. Given the scale of these projects, Hitachi Energy stands to benefit significantly, especially since it holds a dominant 50% share in the domestic market for HVDC solutions.

Hitachi Energy poised to capitalise from infra spend

The report also emphasised the broader infrastructure spending that could favour Hitachi Energy. Goldman Sachs estimates that grid capital expenditure (capex) in India will reach $100 billion by FY32 and could expand further to $500 billion by FY50. As a key player in the industry, Hitachi Energy is poised to capitalise on this massive investment wave.

Beyond grid-related projects, the firm expects additional transmission equipment capex of $14 billion by FY32 and $51 billion by FY50, further enhancing growth prospects for Hitachi Energy. In anticipation of rising demand, the company is also undertaking capacity expansion to meet both domestic and export requirements.

Goldman Sachs revises order inflow projections

Given these growth drivers, Goldman Sachs has revised its order inflow projections for Hitachi Energy. The brokerage now expects an order inflow of approximately ₹18,454 crores for FY25, significantly higher than previous estimates. It has also raised its expectations for FY26, reinforcing the company’s strong growth trajectory.

The firm is also optimistic about the company’s profitability outlook. Goldman Sachs forecasts that Hitachi Energy’s EBITDA margin will rise to 10.5% in FY25 and further expand to 13.4% in FY26—both figures exceeding earlier projections. The brokerage firm also sees additional room for margin expansion, driven by the increasing order book and economies of scale.

Goldman Sachs raises EBITDA estimates

Reflecting its positive outlook, Goldman Sachs has raised its EBITDA estimates for FY25 to FY27 by 10% to 50%. Consequently, it has upgraded its target price for Hitachi Energy to ₹13,350 per share, up from the previous target of ₹8,250 per share, maintaining a ‘buy’ rating on the stock.

Following the bullish outlook, Hitachi Energy’s stock surged by around 8.21% on Wednesday, closing at ₹13,196 per share. The company currently commands a market capitalisation of ₹55,973 crore.

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