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Robust order backlog anchor stronger growth visibility

We revised our EPS estimates by +13.8%/+10.6% for FY27E/FY28E factoring in stronger than expectation execution, robust order inflows and margin outperformance driven by better operating leverage. Hitachi Energy India (POWERIND) reported a strong Q1FY27 performance, with revenue growing ~68.6% YoY while EBITDA margin expanded ~450bps YoY to ~16.0%, driven by disciplined execution, favourable operating leverage and a healthy project mix despite an unrealised forex loss of ~Rs360mn. Order inflow remained robust at ~Rs51bn (+26% YoY, ex-HVDC), taking the order book to a record ~Rs322.2bn and providing strong multi-year revenue visibility. Order momentum remained broad-based across renewables, industries, exports and data centres, with the company securing its maiden BESS project, multiple hyperscaler orders and a ~Rs17bn offshore wind transmission project in Europe. The export pipeline continues to strengthen, with exports contributing ~25% of revenues and the order book. The HVDC pipeline remains healthy, with new greenfield projects expected to be awarded by Q3FY27, while execution of existing projects remains on track and revenue contribution is expected to accelerate from the second and third years of execution. The Karjan manufacturing expansion should further enhance capacity, localisation and export capabilities. Structural growth drivers remain intact across grid modernisation, renewable integration, HVDC, BESS and AI-led data centres, supported by a healthy bidding pipeline and limited commodity risk through pass-through contracts. The stock is currently trading at P/E of 86.8x/62.3x on the earnings of FY27/28E. We upgrade our rating from ‘Reduce’ to ‘Hold’, supported by improved revenue visibility aided by healthy order backlog and better operating leverage, valuing the stock at P/E of 65x Mar’28E (same as earlier) arriving at TP of Rs34,026 (Rs30,768)

We remain positive in long term on POWERIND given

1) it being a leading player in HVDC technology with a healthy order pipeline

2) robust order book of Rs322.2bn (3.5x TTM revenue)

3) increasing demand from high-growth industries such as data centres and BESS,

4) strong global parentage 

5) improving share of services and exports driving margin expansion.

Stronger execution led to better profitability:

Revenue grew by 68.6% YoY to Rs24.9bn (Ple: Rs20.4bn) driven by strong order execution across projects, products and services. Gross margin contracted by 380bps YoY to 40.6% (Ple:43.0%) due to product mix. EBITDA increased by 134.9% YoY to Rs4.0bn (Ple: Rs2.9bn) while EBITDA margin expanded by 453bps YoY to 16.1% driven by operating leverage. PBT (exc. Extraordinaries) increased by 121.6% YoY to Rs4.3bn (Ple: Rs3.1bn) due to better operating performance and higher other income (+13.3% YoY to Rs577mn). Adj. PAT increased by 124.9% Rs3.2bn YoY (Ple: Rs2.3bn) aided by lower effective tax rate which declined by 112 bps YoY to 24.5%. Company reported unrealized foreign exchange movements on receivables/payables (and related assets/liabilities) of Rs 363.7mn adjusted from other expenses and accounted as exceptional losses.

Strong order book at Rs322.2bn (3.5x TTM Revenue):

Q1FY27 Order intake (ex of HVDC) grew by 26.1% YoY to Rs51bn. Order intake stood at Rs322.2bn increased by 11% YoY.

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