Prabhudas Lilladher has upgraded Hitachi Energy India to 'Hold' from 'Reduce' with a target price of Rs 34,026. This move follows a strong Q1 FY27 performance where revenue grew by 68.6% and profit rose significantly. The company's record order backlog and healthy demand from sectors like renewables and data centers are driving the positive outlook, though analysts remain cautious due to high valuations.
Prabhudas Lilladher has upgraded Hitachi Energy India to a 'Hold' rating from 'Reduce', setting a new target price of Rs 34,026. This revision follows the company’s strong financial performance in the first quarter of the 2027 fiscal year, where business growth and order inflows exceeded initial expectations.
Hitachi Energy India reported a 68.6% year-on-year revenue increase to Rs 2,493.69 crore for the quarter. Profit After Tax (PAT) showed even sharper growth, climbing 123.5% to Rs 294.15 crore. Operational efficiency also improved, with the EBITDA margin reaching 16.0%, supported by better project execution and favorable operational leverage.
Record Order Book and Growth Drivers
A major contributor to the company's outlook is its record order backlog, which stood at Rs 32,222.1 crore as of June 30, 2026. The company is seeing broad-based demand, particularly from the renewable energy sector, the rising number of data centers, and export markets. To manage this growing demand and enhance local manufacturing capabilities, the company is investing Rs 2,000 crore in a new greenfield facility located in Karjan, Vadodara.
Why Analysts Remain Cautious
Despite the strong operational performance, the brokerage has maintained a 'Hold' stance rather than a 'Buy'. This cautious approach is primarily due to the stock's current high valuation. Analysts also highlight the nature of the company’s High Voltage Direct Current (HVDC) segment, which contributes heavily to the order book. Because HVDC orders are large and can be infrequent, they can lead to fluctuations in how quickly the order book is replenished.
Investors should monitor the company's ability to maintain these profit margins and ensure timely execution of large-scale infrastructure projects. While the current pipeline is strong, the financial results in future quarters will depend on how effectively the company converts its record order backlog into revenue. Additionally, investors may want to keep an eye on risks such as potential volatility in foreign exchange rates and fluctuations in commodity prices, which remain common challenges for the sector.