Global brokerage Citi has initiated coverage on India’s electrical equipment and transmission sector with a bullish outlook, arguing that power transmission infrastructure is emerging as the “missing link” in the global energy transition.
In an in-depth industry report, Citi highlighted that India is well-positioned to benefit from a prolonged investment cycle in transmission and distribution (T&D) infrastructure, bolstered by rising renewable energy capacity, electrification trends, data centre expansion, and supportive localisation policies.
According to the brokerage, the sector may see a significant increase in demand as India accelerates investments to integrate renewable energy into the grid. The report emphasised that the Central Electricity Authority’s transmission strategy, amounting to approximately ₹7.9 trillion through FY36, indicates the continued development of high-voltage (HV) and high-voltage direct current (HVDC) infrastructure.
Why Citi is Bullish
Citi estimates that HVDC projects alone could represent an opportunity of around ₹1.6 trillion for equipment manufacturers. The brokerage also expects global transmission and distribution capital expenditure to exceed $15 trillion between CY25 and CY50, driven by renewable energy adoption, electrification, and data centre expansion.
India’s electrical equipment manufacturers are expected to gain significantly, as the nation already produces a substantial share of global T&D products and is increasingly establishing itself as a sourcing centre for international markets.
The brokerage believes that ongoing global transformer shortages, rising export prospects, and a surge in domestic transmission investments will continue to drive earnings growth for Indian companies.
Top Stock Picks
Citi has initiated coverage on four key Indian electrical equipment companies, reflecting its positive outlook on the transmission and power infrastructure theme. The brokerage’s preferred picks are led by Hitachi Energy India and GE Vernova T&D India, both of which carry a ‘Buy’ rating owing to their strong positioning in the high-voltage direct current (HVDC) and transmission equipment segments.
is Citi’s top pick, with a target price of ₹46,700, supported by its market leadership in HVDC technology, strong order visibility, and capacity-expansion plans. The brokerage expects the company to be a major beneficiary of India’s accelerating transmission buildout.
follows with a Buy rating and a target price of ₹6,200. Citi believes the company is well placed to capitalise on growing HVDC opportunities, export demand, and capacity additions backed by its global parentage.
For, Citi has assigned a buy rating with a target price of ₹1,100. While the company offers diversified exposure across transmission, railways, industrials, and semiconductors, increasing competition in some business segments may limit upside.
Similarly,has been rated Neutral with a target price of ₹4,000. Citi sees long-term opportunities in transmission and exports but believes near-term growth could be moderated by slower expansion in its generation business and limited participation in upcoming HVDC projects.
Key Risks
Although the outlook is generally optimistic, Citi warned that potential delays in transmission capital expenditures, slower-than-anticipated progress on HVDC projects, increasing competition, relaxing localisation standards, and inflationary factors could affect both sector valuations and earnings growth.
In summary, Citi views India’s power equipment sector as integral to a long-term energy transition narrative, with transmission infrastructure among the most appealing investment prospects in the capital goods sector.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.