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What is the story about?
Brokerage firm Citi has initiated coverage on four power electrical equipment stocks in its latest note on Thursday, June 4, of which, it has a "buy" recommendation on three of them and a "neutral" rating on one.
Even as Power T&D OEMs have re-rated in 2026 on hopes of increased capex expectations, Citi sees further upside potential on recent capacity expansion announcements, incremental opportunities from HVDC and exports.
Citi has initiated coverage on Hitachi Energy India, GE Vernova T&D, and CG Power with a "buy" recommendation and on Siemens Energy with a "neutral" rating.
The brokerage has a price target of ₹46,700 on Hitachi Energy India, which implies an upside potential of 32% from Wednesday's closing levels.
GE Vernova T&D has a price target of ₹6,200, and Citi expects an upside potential of around 25%, while the brokerage has ascribed a target of ₹1,100 on CG Power, indicating an upside potential of 21% from the previous day's close.
Citi wrote in its note that power grids are emerging as the key bottlenecks to energy transition.
Citing the Bloomberg New Energy Forum, who said that renewable penetration, data centers and industrial growth, will drive a $15 trillion global capex within the transmission and distribution segment over calendar year 2025 to 2050.
"As renewables could make up nearly 80% of future capacity additions, higher transmission and grid-stabilization requirements should sustain investment demand," Citi wrote in its note.
The brokerage sees India as uniquely placed as it manufactures nearly 80% of the global T&D products. It also sees India benefitting from a large domestic transmission buildout, thereby accelerating HVDC adoption, favourable localization policies and growing export opportunities.
The Central Electricity Authority's ₹7.9 lakh crore transmission plan for 900 GW renewable integration by financial year 2036, points to a multi-year buildout of HV and HVDC infrastructure.
"We expect HVDC along to represent an OEM opportunity worth nearly ₹1.6 lakh crore, with meaningful barriers to entry supported by localization norms and certification requirements," Citi's note said.
Here are the stocks Citi is betting on:
The brokerage has called the stock a market leader in the HV / HVDC segment. A higher probability of HVDC orders in the near-term, expanding capacity to capture market share, and significant long-term growth visibility is the reason behind Citi's bullish stance on the stock.
Based on all of the reasons highlighted above, Citi has valued the stock at a premium compared to the broader capital goods space, given its higher growth expectations.
Citi's target of ₹46,700 on Hitachi Energy India, values the stock at 65 times its financial year 2028's estimated Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA).
The brokerage is bullish on the stock based on its medium-term growth prospects, which will be supported by capacity expansion and the platform provided by its global parent.
GE Vernova T&D also has a strong HVDC and export exposure, thereby driving Citi's conviction on the stock. The brokerage values the stock at 45 times its financial year 2028 estimated EBITDA.
The company has a diversified exposure to transmission, railways, industrials, and semiconductors, supported by aggressive capacity addition, although increasing competition in the motor and railways segment is limiting the margin upside in this segment.
Citi values the stock at 45 times its financial year 2028 estimated EBITDA and expects its Earnings Per Share (EPS) to grow at a Compounded Annual Growth Rate (CAGR) of 33% over financial year 2026-2030.
Slower-than-expected capex, HVDC rollout delays, rising competition, easing localization norms, inflation and a change in sentiment, which will impact the valuations of these stocks, are some of the key risks highlighted by the brokerage.
Shares of Hitachi Energy India are up 90% so far this year, while those of CG Power are up 43% so far during this period.
Siemens Energy shares are up 30% year-to-date, while GE Vernova T&D shares are up 58% so far this year.
Even as Power T&D OEMs have re-rated in 2026 on hopes of increased capex expectations, Citi sees further upside potential on recent capacity expansion announcements, incremental opportunities from HVDC and exports.
Which Power Stocks Is Citi Buying?
Citi has initiated coverage on Hitachi Energy India, GE Vernova T&D, and CG Power with a "buy" recommendation and on Siemens Energy with a "neutral" rating.
The brokerage has a price target of ₹46,700 on Hitachi Energy India, which implies an upside potential of 32% from Wednesday's closing levels.
GE Vernova T&D has a price target of ₹6,200, and Citi expects an upside potential of around 25%, while the brokerage has ascribed a target of ₹1,100 on CG Power, indicating an upside potential of 21% from the previous day's close.
Why Is Citi Betting On Power Transmission?
Citi wrote in its note that power grids are emerging as the key bottlenecks to energy transition.
Citing the Bloomberg New Energy Forum, who said that renewable penetration, data centers and industrial growth, will drive a $15 trillion global capex within the transmission and distribution segment over calendar year 2025 to 2050.
"As renewables could make up nearly 80% of future capacity additions, higher transmission and grid-stabilization requirements should sustain investment demand," Citi wrote in its note.
Why Is India Unique In Power Transmission?
The brokerage sees India as uniquely placed as it manufactures nearly 80% of the global T&D products. It also sees India benefitting from a large domestic transmission buildout, thereby accelerating HVDC adoption, favourable localization policies and growing export opportunities.
The Central Electricity Authority's ₹7.9 lakh crore transmission plan for 900 GW renewable integration by financial year 2036, points to a multi-year buildout of HV and HVDC infrastructure.
"We expect HVDC along to represent an OEM opportunity worth nearly ₹1.6 lakh crore, with meaningful barriers to entry supported by localization norms and certification requirements," Citi's note said.
Here are the stocks Citi is betting on:
Hitachi Energy India
The brokerage has called the stock a market leader in the HV / HVDC segment. A higher probability of HVDC orders in the near-term, expanding capacity to capture market share, and significant long-term growth visibility is the reason behind Citi's bullish stance on the stock.
Based on all of the reasons highlighted above, Citi has valued the stock at a premium compared to the broader capital goods space, given its higher growth expectations.
Citi's target of ₹46,700 on Hitachi Energy India, values the stock at 65 times its financial year 2028's estimated Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA).
GE Vernova T&D
The brokerage is bullish on the stock based on its medium-term growth prospects, which will be supported by capacity expansion and the platform provided by its global parent.
GE Vernova T&D also has a strong HVDC and export exposure, thereby driving Citi's conviction on the stock. The brokerage values the stock at 45 times its financial year 2028 estimated EBITDA.
CG Power
The company has a diversified exposure to transmission, railways, industrials, and semiconductors, supported by aggressive capacity addition, although increasing competition in the motor and railways segment is limiting the margin upside in this segment.
Citi values the stock at 45 times its financial year 2028 estimated EBITDA and expects its Earnings Per Share (EPS) to grow at a Compounded Annual Growth Rate (CAGR) of 33% over financial year 2026-2030.
What Are The Key Risks To Citi's Thesis On Power Stocks?
Slower-than-expected capex, HVDC rollout delays, rising competition, easing localization norms, inflation and a change in sentiment, which will impact the valuations of these stocks, are some of the key risks highlighted by the brokerage.
How Have Power Electrical Equipment Stocks Fared In 2026?
Shares of Hitachi Energy India are up 90% so far this year, while those of CG Power are up 43% so far during this period.
Siemens Energy shares are up 30% year-to-date, while GE Vernova T&D shares are up 58% so far this year.
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