POWERINDIA

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GVT&D

Lead Sector Rally

Intro Summary India’s clean energy transition is driving demand for high voltage direct current (HVDC) transmission, a critical enabler for moving power from solar parks and windy coastlines to consumption hubs. Investor enthusiasm has sent transmission stocks soaring, with Hitachi Energy India hitting a fresh all-time high and GE Vernova T&D India rallying 183% in the past year. While the structural growth story remains intact, valuations are beginning to look demanding, raising the question of whether earnings can keep pace. Sector Growth & Demand Visibility India’s HVDC market: valued at $3.86 billion in 2025, projected to reach $6.31 billion by 2031 (CAGR 8.55%). Order backlogs highlight sustained demand: Hitachi Energy India: ₹29,872 crore (Dec 2025). GE Vernova T&D India: ₹14,380 crore (Dec 2025). Siemens Energy India: ₹16,200 crore (Sep 2025). Export orders rising: Hitachi and GE Vernova both ~27% of revenue from exports in FY25, up from ~20–22% in FY21. Valuations & Competitive Positioning Hitachi Energy India: ~64x FY28E earnings. GE Vernova T&D India: ~59x FY28E earnings. Siemens Energy India: ~40x FY28E earnings, with best-in-class margins and lower royalty payments (<1% vs Hitachi’s 5–7%). Upside trigger for Hitachi: potential reduction in royalty payments to parent. Siemens focusing on VSC (Voltage Source Converter) technology, more flexible and suited for renewables, while peers remain active in LCC (Line Commutated Converter) projects. Outlook & Risks Near-term beneficiaries: Hitachi and GE Vernova, given strong HVDC ordering momentum. Siemens may see delayed upside but is well-positioned for long-term gains through VSC expertise. Conclusion India’s HVDC transmission sector offers a multi-year growth runway, underpinned by renewable expansion and export opportunities. While fundamentals remain strong, stretched valuations mean investors must weigh near-term upside against execution risks.