Macquarie Initiates ‘Buy’ On 4 Power T&D stocks, sees up to 22% upside

India’s transmission and distribution (T&D) equipment manufacturers are entering what could be one of their strongest growth cycles in decades as rising electricity demand, renewable energy integration and large-scale grid modernisation drive investments in power infrastructure. Against this backdrop, Macquarie has initiated coverage on four listed grid equipment companies with positive ratings.

According to Macquarie, the sector offers a compelling long-term investment opportunity supported by expanding order books, manufacturing capacity additions and growing export opportunities.”We initiate on grid equipment names and prefer CG Power and Industrial Solutions for execution strength, visibility and relatively better valuations,” Macquarie added.

India’s power infrastructure enters a structural growth cycle

Macquarie said India’s electricity ecosystem is entering a multi-year investment phase as rapid urbanisation, industrialisation, rising cooling demand, renewable energy expansion and digital infrastructure significantly increase the need for transmission investments.

The brokerage estimates nearly Rs 7.9 lakh crore (US$85 billion) of investment opportunities in transmission and distribution infrastructure over FY27-FY36. It expects renewable energy integration, grid expansion, electrification, electric vehicles, green hydrogen and AI-driven data centres to become key structural demand drivers for grid equipment manufacturers.

Macquarie also believes global shortages in high-voltage equipment have created an attractive export opportunity for Indian manufacturers, allowing domestic companies to benefit from stronger pricing power and a larger addressable market. The brokerage said rapidly expanding order books across the sector provide earnings visibility over the next three to five years while ongoing capacity additions position companies to capture both domestic and overseas demand.

Macquarie on CG Power: Diversified growth drivers support

Macquarie initiated coverage on CG Power with an ‘Outperform’ rating and a target price of Rs 1,090, implying an upside of about 20%.

The brokerage said CG Power is its preferred investment within the sector because of its diversified growth profile and multiple earnings drivers extending beyond transmission equipment.

Macquarie expects the company to benefit from India’s accelerating grid investments through higher transformer demand, expansion in switchgear manufacturing and strengthening transmission infrastructure. It noted that CG Power is doubling transformer manufacturing capacity while setting up a greenfield switchgear facility to capitalise on rising domestic demand.

Beyond power equipment, the brokerage believes improving industrial capital expenditure, healthy demand for energy-efficient motors, export growth through the Sweden-based drives business and a stronger railway equipment pipeline provide additional growth opportunities.

Macquarie also highlighted the company’s Rs 76 billion outsourced semiconductor assembly and testing (OSAT) project, saying it offers meaningful long-term optionality beyond the core electrical equipment business.

“CG Power: A multi-engine play leveraging India’s grid capex, industrial recovery, railways, & semiconductor. Export ramp-up, an option value,” Macquarie said.

Macquarie on Siemens Energy India: Domestic capex and exports key growth engines

Macquarie initiated coverage on Siemens Energy India Ltd. with an ‘Outperform’ rating and a target price of Rs 4,190, implying an upside of around 22%.

The brokerage said Siemens Energy India offers investors exposure to both India’s transmission infrastructure build-out and global energy investments through the Siemens Energy network.

Macquarie expects transmission to emerge as the company’s largest growth engine as renewable energy additions continue to increase across the country. It also believes the company’s increasing focus on higher-value technologies, including voltage source converter (VSC)-based HVDC systems and grid automation solutions, should support profitability over the medium term.

The brokerage highlighted Siemens Energy India’s role as a manufacturing and engineering hub for the global Siemens Energy group, allowing it to participate in international infrastructure projects while benefiting from India’s expanding transmission capex.

Macquarie believes the combination of domestic transmission investments, export opportunities and technology leadership makes Siemens Energy India one of the strongest long-term investment opportunities within the sector.

“Transmission is emerging as the dominant segment,” Macquarie said.

“It serves as a manufacturing and engineering hub for global projects within the Siemens Energy group, providing exposure to international demand cycles,” the brokerage added.

Macquarie on GE Vernova T&D India: Renewable grid investments underpin long-term visibility

Macquarie initiated coverage on GE Vernova T&D India with an ‘Outperform’ rating and a target price of Rs 5,470, implying an upside of about 13%.

The brokerage said GE Vernova T&D India is well positioned to benefit from India’s transition towards renewable-heavy electricity generation because of its leadership in high-voltage direct current (HVDC), flexible alternating current transmission systems (FACTS) and advanced grid technologies.

Macquarie believes local manufacturing and validation of next-generation HVDC and STATCOM components strengthen the company’s competitive position while improving its prospects in future transmission projects.

The brokerage also noted that improving profitability, healthy order inflows and rising investor confidence in India’s transmission investment cycle have supported a meaningful re-rating in the stock.

“India’s structural transition toward renewable-heavy power generation is driving a multi-year investment cycle in transmission infrastructure,” Macquarie said.

Macquarie on Hitachi Energy India: HVDC leadership strengthens long-term outlook

Macquarie initiated coverage on Hitachi Energy India with an ‘Outperform’ rating and a target price of Rs 38,500, implying an upside of around 16%.

The brokerage said Hitachi Energy India‘s leadership in India’s HVDC market differentiates it from peers as renewable integration drives demand for advanced transmission technologies.

Macquarie noted that the company is executing two major HVDC projects while India’s installed HVDC capacity is expected to nearly double by FY32. It also highlighted Hitachi Energy India’s exposure to electrification, renewable-connected grid modernisation and AI-driven data centre expansion through its high-voltage systems, digital grid technologies and specialised power solutions.

The brokerage added that Hitachi Energy India has the largest order backlog among peers, providing strong multi-year visibility on revenue growth and earnings.

“One of the most significant differentiators is its leadership position in the HVDC market in India,” Macquarie said.

“With the highest order backlog amongst peers, Hitachi Energy provides multi-year visibility on revenue & earnings growth,” the brokerage added.

Conclusion

Macquarie believes India’s transmission and distribution equipment sector is entering a prolonged structural growth cycle supported by rising electricity demand, rapid renewable energy deployment and sustained investments in grid modernisation.

Within the space, Macquarie prefers CG Power because of its diversified growth drivers spanning grid infrastructure, industrial capex, railways and semiconductors, while Siemens Energy India stands out for its balanced exposure to domestic transmission investments and global opportunities. The brokerage also remains constructive on GE Vernova T&D India and Hitachi Energy India.