Power Stocks to Buy: Brokerage bets on 4 scrips, targets indicate up to 23% upside — Do you own any?

Motilal Oswal has maintained a positive view on India’s transmission and distribution (T&D) sector, citing strong investment visibility, rising demand and export opportunities. The brokerage said the sector is witnessing a multi-year growth cycle driven by large capex plans and increasing power demand.

In its latest report, Motilal Oswal expects the T&D value chain to benefit from an estimated investment of about Rs 9 trillion in the transmission segment till 2032. It added that demand remains strong from both domestic and global markets, while supply constraints are supporting pricing and margins.

The brokerage has recommended multiple stocks in the transmission equipment space, with ‘Buy’ ratings on key companies, while maintaining a neutral stance on one stock.

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Below are the key stock recommendations, targets and expected upside:

CG Power and Industrial Solutions

Motilal Oswal has initiated coverage on CG Power with a ‘Buy’ rating and a target price of Rs 900.

The brokerage sees an upside of about 16 per cent from current levels. It said the company is well placed to benefit from strong demand in power systems and rising export opportunities.

Motilal Oswal noted that the ongoing capex cycle in transmission and increasing demand for high-voltage transformers are likely to support earnings growth over the next few years. It also highlighted that capacity expansion plans will help the company capture incremental demand.

Atlanta Electricals

The brokerage has also initiated coverage on Atlanta Electricals with a ‘Buy’ rating and a target price of Rs 1,650.

It expects an upside of around 20 per cent in the stock. According to Motilal Oswal, the company is witnessing strong growth in demand from emerging segments such as data centres, renewable energy and infrastructure.

The report said Atlanta Electricals is expanding its manufacturing capacity, which will support revenue growth and improve margins. It added that rising demand for high-capacity transformers is likely to drive long-term growth.

GE Vernova T&D India

Motilal Oswal has given a ‘Buy’ rating on GE Vernova T&D India with a target price of Rs 4,750.

The brokerage expects an upside of nearly 15 per cent. It said the company is among the key beneficiaries of high-voltage direct current (HVDC) projects and large transmission orders.

Motilal Oswal added that strong global demand, along with India’s increasing role as a manufacturing hub, will support export growth for the company. It also expects sustained margin improvement driven by operating leverage.

Siemens Energy India

The brokerage has reiterated its ‘Buy’ rating on Siemens Energy India with a target price of Rs 3,700.

It sees an upside of about 23 per cent in the stock. Motilal Oswal said the company continues to benefit from strong order inflows and expanding opportunities in both domestic and international markets.

The report highlighted that capacity expansion and higher execution scale are likely to support margin growth over the coming years. It also expects the company to benefit from rising demand in energy transition and infrastructure projects.

Hitachi Energy India

Motilal Oswal has upgraded Hitachi Energy India to ‘Neutral’ with a target price of Rs 27,000.

The brokerage sees a downside of around 7 per cent from current levels. It said the stock has seen a strong run-up, and valuations appear stretched at current levels.

However, Motilal Oswal added that the company continues to benefit from strong order wins, rising export share and capacity expansion. It also noted that margins are expected to remain strong as execution improves.

Sector outlook

Motilal Oswal said the transmission sector is expected to see sustained growth over the next few years, supported by renewable energy integration, grid expansion and rising electricity demand.

It noted that global demand for transformers is also increasing due to investments in data centres, electric vehicles and renewable energy. This is creating export opportunities for Indian companies.

The brokerage added that the demand-supply mismatch in the global market has led to longer lead times and higher prices, which is benefiting manufacturers.

However, it cautioned that risks remain, including supply chain disruptions, semiconductor shortages, rising commodity prices and a slowdown in tendering activity.