Synopsis: Hitachi Energy India is positioned to benefit from rising electrification, renewable integration and India’s rapidly expanding data centre industry. With a record ₹29,555 crore order backlog, strong FY26 financial performance and a ₹4,000 crore capacity expansion plan, the company is preparing for a multi-year growth cycle driven by digital infrastructure demand.
The power ecosystem in India is moving towards a period of investments fuelled by the country’s transition to greener sources of energy, electrification, and even new forms of electricity usage.
While renewable energy installations, transmission system capacity increases, and capex at factories have driven the growth seen over the past few years, data centres are expected to become among the most exciting areas of future business opportunities for manufacturers of power equipment.
In the case of Hitachi Energy India, which works with power equipment ranging from transformers to high-voltage direct current systems, a booming data centre industry in India may turn into a very promising area of business in the coming ten years.
For example, last year the firm reported an impressive order backlog of ₹29,555 crore, a sales increase of 27.6%, and profits growing 157.3%. What remains to be seen now is whether the growth can be attributed to the developing digital ecosystem in India and the associated massive electricity needs.
With a market cap of Rs 1.64 lakh crore, the shares of Hitachi Energy India Ltd are trading at Rs 36,800 and are trading at a PE of 160 compared to their industry’s PE of 36. The shares have given a return of more than 1,800% in the last 5 years.
Electrification Is Reshaping India’s Energy Landscape
The company emphasized the structural shift in India, which was being driven by energy security, favorable policies, localisation and greater electrification. The need for electricity in India will continue to grow in the next decade as industries scale up, more use of electric vehicles occurs, renewables increase and entirely new consumer segments emerge.
In the category of new consumer segments, data centres are playing an increasingly critical role. The increased usage of artificial intelligence, cloud services and digitisation are resulting in rising power consumption.
Alongside this is the growing complexity of the grid, driven by denser loads and greater reliability needs. This, in turn, is generating the need for investment in transmission, distribution and grid infrastructure, all areas where Hitachi Energy already has strengths.
Data Centres Are Emerging As A Major Growth Driver
One of the themes that was extensively talked about on the call included the growing importance of data centres as a source of demand. It was mentioned by management that the current capacity of data centre infrastructure in India is only around 2 gigawatts.
Yet, forecasts indicate that this number could grow by up to 13-18 gigawatts in the coming few years. This would amount to a 6-9 times increase in installed capacity, and since data centres have power needs, including power infrastructure, transformers, substations, power quality, and grid infrastructure, this could be important for the firm.
The management noted that approximately 15 per cent of a data centre investment could be addressed by Hitachi Energy. At this point, despite the fast-growing demand for data centres, the orders placed by data centres are not significant for the total order book relative to those from other industries, such as transmission or renewables. However, growth rates in this sector are significantly faster.
Artificial Intelligence Is Accelerating Power Demand
The development of data centres is intricately tied to the adoption of AI technology. According to management, AI technology has become part of the modern world and has led to changes in energy consumption. The computing power required by AI tasks is high and therefore requires high energy consumption.
With this, Hitachi Energy has engaged in conversations within the industry about AI and energy. This is evidenced by the company’s organisation of a pre-conference to discuss how energy infrastructure has evolved in an economy driven by artificial intelligence.
These discussions validate management’s belief that future electricity demand will be influenced by digital infrastructure rather than industrialisation. As AI becomes more common in different industries, there will be a need for data centres to have high energy density, availability, and a reliable grid.
Strong Financial Performance Provides A Solid Foundation
The capabilities of Hitachi Energy to take advantage of any emerging opportunities have been helped by strong financial performance. For FY26, the firm received orders totalling ₹18,456.5 crore, while its revenues surged 27.6% to ₹8,147.7 crore.
Profitability was greatly improved. PBT (profit before tax) soared 166.3% to ₹1,375.2 crore, while PAT (profit after tax) climbed 157.3% to ₹987.8 crore. Its EBITDA stood at ₹1,252.5 crore, resulting in a margin of 15.4%.
The March quarter showed strong financial numbers for the company. Its revenue grew 46.2% to ₹2,754.1 crore, while PAT climbed nearly 80% to ₹330.5 crore. It had also managed to generate cash flow from operations worth ₹1,746.3 crore during FY26.
This clearly indicates that the company has been successful in generating profitable results despite having a large order book. The financial success will help Hitachi Energy invest in other areas such as data centres and energy storage.
A Record Order Backlog Supports Future Visibility
A key advantage of Hitachi Energy is the record backlog orders value of ₹29,555 crore for the March 2026 quarter, with an impressive growth rate of 53.6% from the previous year. The orders backlog indicates visibility of revenues for the future quarters ahead.
Managers pointed out that the order intake in FY26 was growing in diverse areas such as industry, railways, renewable energy and data centres. Although the largest part of order intake belongs to the transmission business, the emerging industries are also making a substantial contribution to the orders backlog.
Hitachi Energy retains market leadership in utilities, HVDC projects, industrial solutions and data centre solutions. Demand drivers in these businesses are expected to be driven by long-term trends and not just cyclical fluctuations in the economy. This gives managers more confidence in expanding the company’s production capacities.
Capacity Expansion Signals Confidence In Long-Term Demand
One of the most important signs of the management’s confidence in future growth is certainly the recently announced capital expenditure programme. During the quarter, the board sanctioned another ₹2,000 crore capital expenditure, bringing the total announced capex to approximately ₹4,000 crore.
The largest part of the investment includes building a greenfield transformer plant at Karjan, Gujarat. This will be a manufacturing plant for large power transformers and HVDC converter transformers, which is expected to be ready by the last quarter of the 2028 calendar year.
It has been stated by the management that this is not solely because of the increased demand for renewable and transmission assets but also because of the opportunities like data centres. The new plant is anticipated to provide the company with around 30-40 GVA capacity, doubling its current capacity.
The company’s management says that this is not because of any surge in demand. It is due to the fact that electrification, renewable generation, energy storage, and data centres are seen as an opportunity that can be utilised for several years.
Data Centres, Energy Storage And Renewables Create A Powerful Combination
Despite the popularity and importance of data centres, management considers them as just one of many growth sectors within an ecosystem. The demand for transmission capacity from renewable energy sources is expected to remain high, while battery energy storage systems are seen as yet another promising segment.
Management referred to estimates of around 80 gigawatts of battery storage needs in the coming five to six years. Transformers, substations and other grid technology and power equipment will be needed to realise such projects.
In parallel, renewable energy will continue to fuel investments in transmission capacity. Collectively, renewables, energy storage and data centres create demand for new forms of electricity that require advanced power equipment and grid solutions. Through its extensive product portfolio, Hitachi Energy can address various aspects of the value chain, not only focusing on one customer segment.
Technology Leadership Could Be A Key Differentiator
The strategy of the firm involves more than increasing capacity. Technology leadership was one of the aspects pointed out by the management as being critical, especially in light of the formation of new industries.
There are many products that are required for use in the data centres and energy storage applications that currently form part of Hitachi Energy’s global portfolio. It plans to adapt these products to the Indian market in order to make sure that the firm remains competitive.
Technology transfer from the mother firm ensures that the company can gain access to products that have been developed using cutting-edge technology. Hitachi Energy India will adapt these products to suit the needs of its clients in the emerging industries. The company has made plans for AI-enabled operations via its AI Nexus project, which aims to enhance decision-making and improve efficiency.
The Road Ahead
With India witnessing rapid expansion in its digital economy, data centres are becoming a crucial part of its infrastructure ecosystem. In case installed capacity rises from less than 2 GW to 13-18 GW over the coming years, the potential opportunities from a demand perspective in terms of transformers, substations, power quality and grid would create immense upside for Hitachi Energy India.
This company comes into this new phase with a solid foundation. The FY 2026 was a year where the company booked its best-ever bookings, saw robust growth in revenues, witnessed strong margin expansion, and reached a record order book backlog at ₹29,555 crores. In response, management plans on spending close to ₹4,000 crores of cumulative capex to expand capacity.
Transmission and renewables continue to be the two most important segments for the company’s performance. However, data centres are currently witnessing the fastest growth within their pipeline of opportunities. Given what is planned in the area of digital infrastructure development in India, this should mean that there is enough potential here for supporting Hitachi Energy through multiple years of growth cycles ahead.
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