Add This Power Sector Midcap Stock For Target Price of Rs 3,438/Share: HDFC Securities

HDFC securities has come up with an "Add" rating on Hitachi Energy India Ltd. (formerly known as ABB Power Products and Systems India Limited) in its recent report published on 23 March 2023. The brokerage has assigned a target price of Rs 3,438 apiece. Considering the given target price and the current market price, the stock has the potential to surge up to 4%. Hitachi Energy is a power sector midcap stock having a market capitalisation of Rs. 14,128.36 crore.

Current Market Price, Returns, 52 Week Low & High

The shares of Hitachi Energy last traded at Rs 3,333.60 apiece, down 0.70% from its previous close of Rs 3,357.15 apiece. It recorded 52 week high on 1 September 2022 at Rs 3,915 apiece, and 52 week low on 11 May 2022 at Rs 2,750.10 apiece, respectively.

Since its listing on date 30 March 2020 on the exchange, the stock has given 366.89% positive return. In the past week it has given 0.83% positive return. In the past 1 month it has given 1.81% positive return and in 3 months, it has given 0.82% positive return. However, it has fallen 2.6% in the past 1 year.

Add for a target price of Rs 3,438 apiece

According to HDFC Securities, Looking at the government and private capex spending plans, Hitachi Energy India (HEI) seems to be one of the biggest beneficiaries of a large surge in power sector capex due to EVs, metro/high-speed rails, etc. HEI is one of the top technical players in the electrical engineering space having four business units namely, grid automation, grid integration, high voltage products and transformers.

Its revenue is expected to expand through (1) grid automation and modernisation; (2) rail electrification; (3) expansion in the metro network; (4) rise of e-mobility; and (5) hyper growth in data centres. It has another INR 50bn revenue opportunity from Vande-Bharat ancillary orders. "Given robust order inflows, we expect HEI FY22-25E EPS CAGR of 67.9%. We initiate on HEI with an ADD rating (given punchy valuation), with a TP of INR 3,438/sh, valuing the company at 38x Mar-25E EPS," the brokerage has said.

Disclaimer - The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.