Jefferies top power sector picks: Upgrades Siemens Energy, initiates coverage on GE Vernova T&D

The core of Jefferies’ thesis is that transmission project activity has stepped up sharply and is likely to stay elevated for several years. They expect power T&D equipment demand to double, while supply additions are still likely to lag, keeping pricing firm for equipment makers.

The brokerage said the broader opportunity set remains large. It pegged India’s national transmission opportunity at more than Rs 14.36 lakh crore, including Rs 7.93 lakh crore under the transmission plan for 900 GW of renewable energy by FY36 and another Rs 6.43 lakh crore tied to the Brahmaputra basin pipeline across phases.

“We believe power T&D equipment will see strong growth in FY26-FY30E backed by transmission projects. Data center will only add to this demand as 30% of capex cost is linked to power T&D equipment,” Jefferies said in the report.

Hitachi Energy: Jefferies rates ‘Buy’

Jefferies remains most constructive on Hitachi Energy India Ltd. among the listed power T&D names. It has retained a ‘Buy’ rating with a target price of Rs 43,145, implying 17% upside from the reference price used in the report.

The brokerage said Hitachi’s order book rose 54% year-on-year to Rs 29,600 crore as of March 2026, driven by another Rs 9,500 crore-plus HVDC order after the company had already booked more than Rs 10,000 crore of HVDC orders in FY25. Jefferies expects execution of this order pipeline to drive revenue CAGR of 36% over FY26-FY29. It also sees EPS CAGR of 54% over FY26-FY29, aided by operating leverage and margin expansion.

Hitachi’s positioning in HVDC is central to the investment case. Jefferies said the company has 49% share of India’s operational HVDC capacity and that this rises to 59% when under-construction projects are included. It expects Hitachi to benefit from further order wins as India scales up HVDC capacity and builds out long-distance transmission infrastructure for renewable integration.

Jefferies also said Hitachi’s shift away from EPC work toward product design, engineering, installation and commissioning gives it better control over margins. The brokerage expects EBITDA margin to expand by 760 basis points to 23% by FY29, with fixed costs falling from 15% of sales in FY26 to 9% by FY29 as revenue scales up.

Siemens Energy India: Jefferies rates ‘Buy’

Jefferies has also retained its ‘Buy’ rating on Siemens Energy India Ltd. and raised its target price to Rs 4,500 from Rs 4,300. That implies 17% upside from the stock price used in the report.

The brokerage’s case on Siemens Energy rests on the same transmission capex upcycle, but with an added angle around capacity expansion. Jefferies said Siemens Energy’s order book stood at Rs 18,400 crore as of March 2026, up 22% year-on-year, giving it revenue visibility for 30% CAGR over FY25-FY28. It expects EPS CAGR of 42% over the same period, driven by operating leverage as utilisation rises across its T&D facilities.

Jefferies noted that Siemens Energy is investing Rs 2,800 crore to quadruple power transformer capacity to 60,000 MVA through greenfield and brownfield expansion, while also adding large reactors and expanding high-voltage switchgear capacity. The brokerage said the company’s T&D business, which accounted for 56% of first-half FY26 sales, is well placed to benefit from transmission spending and export demand tied to global T&D and US data centre investments.

Margins are another part of the story. Jefferies expects Siemens Energy’s EBITDA margin to expand by 400 basis points to 23% by FY28 as fixed costs fall from 16% of revenue in FY25 to 11% by FY28. It said current margins still reflect sub-75% utilisation at T&D facilities, leaving room for improvement as execution picks up.

GE Vernova T&D India: Jefferies initiates coverage with ‘Hold’

Jefferies has initiated coverage on GE Vernova T&D India with a ‘Hold’ rating and a target price of Rs 6,000, implying 9% upside from the reference price in the report.

The brokerage said GE Vernova is one of India’s three qualified HVDC suppliers alongside Hitachi Energy and Siemens Energy, and is positioned to benefit from the same domestic transmission cycle. GE’s order book rose 70% year-on-year in FY26 to Rs 21,500 crore, equivalent to 3.5 times FY26 sales, helped by two large HVDC orders in India. Jefferies expects this to support revenue CAGR of 29% over FY26-FY29 and EPS CAGR of 35% over the same period.

Jefferies said GE currently has 23% share in India’s operational HVDC capacity. It also highlighted that GE moved ahead of Siemens Energy in market share across operational plus under-construction HVDC projects after securing the Khavda-South Olpad HVDC VSC project from Adani Energy in January 2026. The brokerage estimates that project could translate into an order value of more than Rs 6,500 crore for GE based on recent HVDC awards.

Even so, Jefferies has stayed more measured on the stock than on Hitachi or Siemens Energy. It said GE’s export business has historically benefited from lumpy parent-linked orders, which supported margin expansion in FY24 and FY25, but visibility on such flows is lower now. With no large parent orders in FY26, export order flow fell 64% year-on-year to Rs 12 billion, which could cap further gross margin upside in FY28 and FY29.

Jefferies said its Rs 6,000 target values GE Vernova T&D at 65 times FY28 earnings. While it still expects 36% EPS CAGR over FY26-FY28, it does not see enough upside at current valuations to turn more aggressive on the stock.

The sector call: demand doubles, supply still lags

The broader sector call is what ties the three stock views together. Jefferies expects transmission capex to rise 2.2x to Rs 5.9 lakh crore over FY26-FY30 from Rs 2.7 lakh crore in FY22-FY26, while overall power capex could rise 2.4x to more than $270 billion over FY26-FY30. Within this, transmission equipment is a direct beneficiary, and the brokerage believes supply will remain tight even after planned capacity additions.

Transformer manufacturing capacity in India is expected to rise to about 577 GVA from 307 GVA in FY25, but Jefferies said that still leaves the industry chasing a much larger pipeline of transmission awards and equipment demand. The brokerage also sees data centres as an incremental driver, saying about 30% of data centre capex is linked to power T&D equipment.

Conclusion

Jefferies’ latest sector initiation makes one thing clear: it sees India’s power transmission buildout as a durable earnings cycle for equipment makers, not just a short-term order spike. Hitachi Energy and Siemens Energy remain its preferred listed plays, with both carrying ‘Buy’ ratings and 17% upside to their respective targets. GE Vernova T&D is also expected to post strong growth, but Jefferies has started with a ‘Hold’, arguing that much of that upside is already reflected in the stock.

For investors tracking the next leg of India’s power capex cycle, Jefferies is effectively drawing a three-stock map of the T&D theme: Hitachi for HVDC leadership and earnings growth, Siemens Energy for operating leverage and capacity expansion, and GE Vernova for order-book visibility but with tighter valuation comfort.

Disclaimer: The institutional equity research ratings, target prices, and projected financial metrics outlined in this brokerage summary report for the power transmission and distribution (T&D) sector are for informational and educational purposes only. They do not constitute investment advice, a formal financial recommendation, or an offer or solicitation to buy, sell, or hold equity shares.

Investments in the capital goods and electrical equipment industries carry substantial financial risk. The performance of these stocks is heavily dependent on corporate capex execution timelines, the finalization of large infrastructure contracts (such as HVDC projects), state and central regulatory policies, raw material costs, global supply chain stability, and emerging data center infrastructure trends. Readers are strongly advised to perform their own due diligence and consult a SEBI-registered investment advisor or certified financial professional before making financial allocations based on these targets.

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