CG Power, Hitachi Energy India, GE Vernova shares rise up to 4% today; here's why 

Shares of power transmission equipment makers such as Hitachi Energy India, GE Vernova T&D India and CG Power surged on Thursday after brokerage Citi initiated coverage on the sector. The brokerage said that transmission infrastructure is emerging as a key bottleneck in the global energy transition.

Hitachi Energy India shares ended 4.22% higher at Rs 36,700 in the current session. Market cap of the firm rose to Rs 1.63 lakh crore. 

GE Vernova T&D India shares too inched 2.46% higher at Rs 5082.50. Market cap of the firm stood at Rs 1.30 lakh crore. 

On similar lines, CG Power stock gained 3.69% to end at Rs 939.70. However, Siemens Energy stock ended on a flat note at Rs 3691.50. 

According to Citi, electricity transmission networks are emerging as a crucial bottleneck in the global energy transition, as nations raise investments in renewable energy projects, electric vehicles, manufacturing facilities and energy-intensive data centres. This growing demand for power is expected to trigger a significant increase in spending on transmission and distribution (T&D) infrastructure over the coming decades.

The brokerage, citing estimates from BloombergNEF, said global capital expenditure on transmission and distribution networks could total nearly $15 trillion between 2025 and 2050. Citi believes India is well positioned to capitalise on this opportunity, given its strong manufacturing base for transmission and distribution equipment. The country currently accounts for about 80 percent of global production in this segment and is also preparing for a large-scale expansion of its domestic power grid.

Citi further pointed to the Central Electricity Authority's roadmap for integrating 900 GW of renewable energy capacity by FY36. The plan is expected to drive sustained investments in high-voltage (HV) and high-voltage direct current (HVDC) transmission infrastructure over the next several years. The brokerage estimates that the HVDC segment alone could represent a business opportunity worth around Rs 1.6 trillion for equipment manufacturers and suppliers.

Citi cited slower capex, very high valuations and rising competition as key risks behind its assumptions.

 

The brokerage began coverage on Hitachi Energy India with a 'Buy' rating and a target price of Rs 46,700 per share, indicating a potential upside of around 25 percent from current levels. 

It also initiated coverage on GE Vernova T&D India with a 'Buy' recommendation and a target price of Rs 6,200 per share. Similarly, CG Power and Industrial Solutions received a 'Buy' rating with a target price of Rs 1,100. 

In contrast, Citi adopted a more cautious stance on Siemens Energy India, initiating coverage with a 'Neutral' rating and a target price of Rs 4,000 per share.

 With inputs from Shail Bhatnagar