A transformer stock is currently trading at a 28 percent discount, making it an interesting opportunity for investors to watch. With its potential for growth, this stock could present a favorable entry point, especially for those looking to capitalize on market shifts and future performance.
Price Movement
Shares of Hitachi Energy India Ltd are trading at Rs.12,055.60 each, representing a 28 percent drop from its 52-week high price of Rs.16,549.95 per share. On Tuesday, the stock reached an intra-day high of Rs.12,119.85, rising 3 percent from its previous closing price of Rs.11,754.75 each.
Business Overview
Hitachi Energy India has been a pioneer in High-Voltage Direct Current (HVDC) technology, with over half of the HVDC links in India utilizing its solutions. The company has also partnered with Indian Railways to develop Scott Transformers, crucial for powering high-speed rail and metro systems nationwide. Furthermore, Hitachi Energy India provides comprehensive sustainable energy solutions, supporting the integration of renewable energy sources like solar, wind, and green hydrogen, in line with India’s net-zero goals.
Products and Services
Hitachi Energy India offers a diverse range of products and services, including advanced grid solutions such as digital twin technologies like IdentiQ, which improve power grid efficiency and security. Additionally, the company supports the growing electric vehicle market in India through its Grid eMotion fleet solution, facilitating the widespread adoption of electric vehicles across the country.
Strategic Developments
Hitachi Energy India has secured a significant HVDC order for the Khavda-Nagpur project, enabling renewable energy transmission over 1,200 kilometers. The company highlighted the crucial role of HVDC technology, which it has developed over the past 70 years. Upcoming HVDC projects, including Bhadla, Khavda-Olpad, and Pang-Kaithal, are expected to be awarded within the next 12 months.
The company announced plans to raise Rs.4,200 crores, primarily for capital expansion and working capital requirements. Additionally, a new service business unit will be launched on April 1, 2025, to enhance customer experience and leverage service opportunities.
Domestic Network and Capacity
The company has a substantial installed base in India, valued at approximately Rs.82,000 crores, supported by 19 manufacturing units across eight locations. As of the first nine months of FY24, its order backlog stands at Rs.18,994 crores, reflecting strong demand and a solid pipeline for future growth.
Financial Performance
Turning towards the financials of the company, Hitachi Energy India Ltd reported Q3 FY25 revenue of Rs.1,620 crore, rising 27 percent from Rs.1,274 crore in Q3 FY24. Moreover, net profits of the company increased remarkably by 495 percent to Rs.137 crore, from Rs.23 crore in the same period.
Important Financial Ratios
The Return on Capital Employed (ROCE) of the company stands at 18.08 percent, while the Return on Equity (ROE) is 14.21 percent.
The company’s Price-to-Earnings (P/E) ratio is 158.91, higher than the industry average of 74.04. However, the company maintains a good current ratio of 1.28 and a low debt-to-equity ratio of 0.25.
Written by – Siddesh S Raskar
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
