Hitachi Energy Shares Rally 12% on 86% Q2 Order Growth, PAT Up

Hitachi Energy’s Order Surge Puts Execution and Margins in Focus

A sharp rise in orders and revenue lifted the shares, but weaker margins remain a key test for the company’s growth outlook.

Orders and revenue drive the market’s response

Hitachi Energy shares rose more than 12% in intraday trade after the company reported its September 2026 quarter results. The stock opened 5% higher at ₹29,990 and reached ₹32,070 on the NSE. At 10:30 AM, it was up 11% at ₹31,725. Trading was also unusually active by value: nearly 0.5 million shares worth ₹1,513.78 crore changed hands.

The underlying figures offered investors more than a headline profit increase. Orders climbed to ₹4,120.8 crore from ₹2,217.1 crore a year earlier, while revenue rose to ₹2,996.5 crore from ₹1,832.6 crore. The scale of order growth points to strong demand and gives the company a larger pool of work to execute. It does not, by itself, determine how quickly that work will translate into revenue or profits.

Profit growth came alongside margin pressure

Net profit increased 21% year on year to ₹318.5 crore, while EBITDA rose 36% to ₹406 crore. Yet EBITDA margin narrowed to 13.5% from 16.3% a year earlier, a contraction of around 28 basis points. The combination matters: faster revenue growth did not translate into equivalent margin expansion, making the quality and mix of future execution important to watch.

Jefferies noted that gross margin fell 420 basis points to 38.3%, citing product mix. It said quarterly EBITDA was 6% above its estimate, but that a 26% sales beat was partly offset by margins 250 basis points below expectations. Motilal Oswal also described the result as mixed: stronger execution was offset by margin weakness, leaving profit broadly in line with its expectation. These assessments suggest the rally reflects confidence in demand and delivery, while profitability remains a qualification.

Exports, services and backlog shape the outlook

Exports grew 41% year on year in the quarter and 184% in the first half, with orders from Asia, Africa, the Middle East, Europe and the US. The service business expanded 77% in the quarter and 36% in the first half. The company also reported a record-high backlog of ₹33,335.4 crore as of September 2026.

Management cited renewable-energy additions, grid modernisation and transmission expansion as sources of demand, and said it had visibility to 2035. It also pointed to higher-margin export and service orders as potential support for margins. Those factors could help balance weaker margins on some project work, but the outcome will depend on the pace and profitability of execution. Strong orders are an opportunity, not a guarantee of returns.

Broker targets differ, highlighting valuation uncertainty

Motilal Oswal upgraded the stock to Buy from Neutral and set a target of ₹35,800, slightly below its previous ₹36,000 target. The brokerage cited improved execution but lower margin expectations, and revised its estimates for the coming financial years. Jefferies maintained Buy with a ₹45,790 target, pointing to demand visibility and potential support from exports and services. The gap between targets reflects different assumptions; neither is a certain outcome.

Key Highlights

• Q2 order inflows rose 85.9% to ₹4,120.8 crore.
• Revenue increased 63.5% to ₹2,996.5 crore; net profit rose 21% to ₹318.5 crore.
• EBITDA grew 36%, but its margin narrowed to 13.5% from 16.3%.
• The September backlog reached a record-high ₹33,335.4 crore.
• Export and service growth support the outlook, while project mix and margins remain watch points.

Investor Note: The results strengthen the demand and order-book case for Hitachi Energy, but investors should weigh that against margin pressure and the share-price rally. Monitor whether execution, exports and services can sustain growth while improving profitability; brokerage targets are opinions, not assurances.