Hitachi Energy India’s shares hit a new 52-week high of ₹38,640 apiece on Friday, and are up almost 8% since it declared robust March quarter (Q4FY26) results. Hitachi also announced an additional ₹2,000 crore in capital expenditure, bringing its cumulative announced capex to ₹4,000 crore.
The move comes at a time when India’s transmission and power infrastructure cycle is gathering pace amid rising renewable integration, electrification and the rapid expansion of data centres.
Hitachi said the latest investment will primarily go towards a greenfield large power transformer facility in Karjan, Vadodara, as well as capacity additions across its businesses. The plant is expected to be operational by FY28-end. The company would also be adding two additional assembly lines in Bengaluru, over and above the existing six lines in the city, for the power quality segment.
Order inflow grew by 10.6% year-on-year to ₹2,422.5 crore in Q4FY26, taking the order backlog up 53% to ₹29,555 crore at March-end or about 3.7 times its FY26 revenues. This provides encouraging medium-term revenue visibility.
Q4FY26 revenue rose by as much as 46% to ₹2,754 crore, but Ebitda growth was faster at 75% to ₹416 crore owing to relatively slower rate of growth in staff costs and other expenses. Ebitda margin expanded by 248 basis points to 15%, even as gross margin contracted 30 bps to 37% due to an adverse product mix, given the increased share of lower-margin HVDC revenue.
Analysts expect margins to improve over the medium-term. Motilal Oswal Financial Services expects gradual gross margin improvement, supported by better pricing discipline and an improving execution mix, with Ebitda margin (adjusting for forex translations) improving to 17.2% and 19.0% in FY27 and FY28, respectively.
Management commentary suggests it sees a large opportunity from the electricity infrastructure needed to support hyperscale data centres. Managing director and chief executive officer Venu Nuguri said in the earnings call that India currently has less than 2GW of data centre capacity, but this could rise to 13-18 GW over time. He added that nearly 15% of data centre capex falls within Hitachi Energy’s addressable market.
According to ICICI Securities, “Transmission capex is going strong, with more than ₹3.5 trillion worth of HVDC orders under planning – we believe it is yet to pick up. We estimate equipment awarding over ₹65,000 crore over the next 18 months.”
To be sure, the upbeat outlook may already be reflected in valuations. The Hitachi stock trades at a whopping 115 times FY27 estimated earnings, as per Bloomberg data, making it one of the most expensive stocks in the capital goods sector.
That explains why most broking firms remain cautious on the stock despite turning more positive on the business outlook. Motilal Oswal values Hitachi at 60 times June 2028 estimated earnings, while Nuvama Institutional Equities and ICICI Securities use 60-63 times FY28 earnings multiples despite raising estimates after the quarter. In other words, it is difficult to justify Hitachi’s current valuations despite the promising industry growth prospects.