Buy Hitachi Energy India; target of Rs 18,000: ICICI Securities

ICICI Securitie`s research report on Hitachi Energy India

Hitachi reported operating margin of 12.7% (+190bps), ahead of consensus expectations in Q4FY25. The margin was 7% in FY24. It has also guided for double-digit margins in FY26, allaying the street concerns. Revenue grew 11% YoY to INR 18bn; EBITDA came in at INR 2.4bn and profit stood at INR 1.8bn in Q4, a sharp beat to consensus estimates of INR 2.2/1.5bn. It has won 2 HVDC orders worth INR 200bn (our estimates).

Outlook

While it had booked the first order in FY25, the other order will be booked in Q1FY26. It gained orders worth INR 86bn (ex-HVDC OB, our estimate, +56% YoY) in FY25. As a result, we estimate orderbook at INR 290-300bn or 4x book to bill ratio for FY26. We expect earnings to grow at 52% CAGR over FY25-28E. Maintain BUY with a revised TP of INR 18,000 (earlier INR 16,617).

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