Budget 2026: How a ₹12.2 Lakh Crore Capex Boost Powers Hitachi Energy

Introduction: A Budget Tailored for Infrastructure Growth

The Union Budget 2026, presented by Finance Minister Nirmala Sitharaman, has laid out a clear roadmap focused on sustained capital expenditure and bolstering domestic manufacturing. For companies like Hitachi Energy India Ltd., a key player in the capital goods and electric equipment sector, the budget's provisions act as a significant tailwind. The government's continued emphasis on infrastructure development, energy transition, and technology-led growth aligns perfectly with Hitachi Energy's core business segments, promising a robust demand environment.

The Capex Juggernaut Continues

A standout announcement in the budget is the proposed increase in public capital expenditure to a record ₹12.2 lakh crore for FY 2026-27. This represents a substantial continuation of the government's infrastructure push, up from ₹11.2 lakh crore in the previous year. This allocation is a direct positive for Hitachi Energy. Increased spending on railways, roads, urban infrastructure, and dedicated freight corridors translates directly into higher demand for power transmission and distribution equipment, including transformers, switchgear, and grid automation solutions that form the backbone of the company's portfolio.

This move validates the pre-budget expectations of industry leaders like N Venu, MD & CEO of Hitachi Energy India, who had anticipated a strong continuity in capex spending. The sustained government investment provides strong revenue visibility and supports the company's already healthy order backlog of over ₹29,000 crore.

Powering India's Tech and Manufacturing Ambitions

The budget places a strong emphasis on scaling up manufacturing in strategic sectors. The proposal to launch a scheme for the enhancement of construction and infrastructure equipment directly benefits the capital goods industry. Furthermore, the decision to increase the outlay for the electronics components manufacturing scheme to ₹40,000 crore is a crucial indirect driver for Hitachi Energy.

This massive investment in electronics and the launch of the India Semiconductor Mission 2.0 will accelerate the growth of data centers and high-tech manufacturing facilities. As highlighted by Mr. Venu, these modern industries require robust, flexible, and high-quality power systems. Hitachi Energy is a critical enabler of this ecosystem, providing the essential power grid technologies needed to support the nation's burgeoning digital infrastructure.

A Clear Focus on Energy Transition and Grid Modernization

Hitachi Energy's strategic focus on enabling a sustainable energy future finds strong support in the budget. The proposed ₹20,000 crore outlay for Carbon Capture Utilization and Storage (CCUS) over the next five years opens new avenues for the company in industrial decarbonization projects across power, steel, and cement sectors.

Additionally, customs duty exemptions for capital goods used in manufacturing lithium-ion cells and for goods required for nuclear power projects reinforce the government's commitment to clean energy. As India integrates more renewable energy into its grid, the need for advanced grid technologies to ensure stability and reliability becomes paramount. This is Hitachi Energy's core strength, positioning it to play a pivotal role in India's energy transition journey.

Key Budget 2026 Announcements for Hitachi Energy

Financial Sector Reforms to Expedite Projects

The proposal to restructure the Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) is another significant development. As the primary lenders to the power sector, enhancing their efficiency and scale can de-bottleneck project financing. For capital goods suppliers like Hitachi Energy, this means a potentially faster conversion of projects from planning to execution, leading to a more streamlined and predictable order inflow.

Conclusion: A Future Powered by Policy Support

Union Budget 2026 provides a clear and supportive policy framework that reinforces Hitachi Energy's strategic direction. The unwavering focus on capital expenditure, domestic manufacturing, and energy transition creates a fertile ground for growth. The announcements are set to bolster the company's strong market position, support its robust order book, and ensure its continued participation in building India's modern infrastructure. For investors, the budget solidifies the positive outlook for the capital goods sector, with Hitachi Energy standing out as a prime beneficiary.