Power T&D: Motilal Oswal stock calls, targets 2026

Motilal Oswal flags a multi-year T&D capex cycle

Motilal Oswal Financial Services has initiated coverage on India’s power transmission and distribution (T&D) space, arguing that a structural capex cycle is underway. The brokerage said it is maintaining a positive stance as investments in grid build-out continue. The focus is linked to India’s energy transition and the rising need to integrate renewables into the grid. Motilal Oswal also pointed to global supply-demand dynamics in transformers as an additional tailwind. It noted that even partial execution of planned investments can support multi-year earnings visibility for equipment makers and system players.

Stock ratings and target prices: buys on four names

Motilal Oswal initiated coverage with ‘buy’ ratings on CG Power, Atlanta Electricals, and GE Vernova T&D, and reiterated its positive stance on Siemens Energy. It also upgraded Hitachi Energy to ‘neutral’, citing valuation considerations. The brokerage acknowledged that valuations across the sector are no longer cheap, following sharp stock price moves. Still, it said earnings upgrades and export optionality can justify premium multiples for select companies.

National Electricity Plan: the size of the opportunity

Motilal Oswal’s report referenced India’s National Electricity Plan (NEP), which outlines nearly ₹900,000 crore of T&D capex till 2032. The brokerage said this creates a large addressable market across the value chain, from transformers and switchgear to project execution. It also flagged that ordering activity accelerated from FY22-23 as renewable integration picked up pace. The underlying argument is that a long pipeline, even if executed in parts, can provide visibility for revenue and margins in capital goods businesses tied to grid investments.

FY26 ordering slowdown, but recovery expected

Alongside the constructive long-term view, Motilal Oswal flagged that ordering activity declined in FY26, with schemes awarded dropping sharply year-on-year. While the note did not quantify the decline in the provided details, it did indicate that the slowdown is a near-term data point investors are tracking. The brokerage expects order inflows to recover over the next 1 to 2 years as manufacturing capacities expand. This expectation supports its view that the longer-term growth trajectory remains intact, even with a temporary dip in awarding.

HVDC emerges as a high-value, limited-competition segment

A key theme in the report is high-voltage direct current (HVDC), which the brokerage described as a segment with significant value addition and limited competition. The NEP pipeline includes over 32 GW of HVDC capacity, with a substantial portion already tendered. The report said the segment is dominated by a few players, including Hitachi Energy, Siemens Energy, GE Vernova, and BHEL, making it an oligopolistic market. In such structures, pricing power and execution capability tend to matter more than sheer capacity.

Export demand and long lead times support Indian suppliers

Motilal Oswal highlighted an export opportunity in power transformers. It cited that the US imports nearly 80% of its power transformers, while global lead times are in the 2 to 4 year range. The brokerage said Indian manufacturers are positioned to tap demand from developed markets, given global constraints. It also linked rising global investments in renewable energy and data centres to stronger demand for T&D equipment.

Capacity additions: supply rising, but pricing pressure not expected

The report noted capacity additions of about 200 to 220 GVA over the next 2 to 3 years. Even so, it expects demand to remain strong enough to absorb incremental supply without pushing pricing down. Motilal Oswal said this supply-demand balance can support margins as companies scale up production. The central risk it acknowledged is valuation, not a near-term collapse in demand.

Battery storage is another future driver

Battery energy storage systems (BESS) were cited as a future driver, with India targeting 13.5 GW capacity by FY27 and over 50 GW by FY32. While the report’s primary focus was T&D equipment, it positioned storage targets as part of the broader grid modernisation requirement. Storage-led investments can add to grid planning complexity and reinforce demand for transmission augmentation and related equipment.

What other broker notes are saying on orders and margins

Separate brokerage expectations in the provided material pointed to strong order and execution trends among select names. Nomura expected CG Power to record order inflows of about ₹4,350 crore, supported by two orders worth around ₹330 crore from Power Grid in December 2025, while GE Vernova T&D India’s order inflows were estimated at about ₹12,000 crore led by an HVDC order win. Nomura also expected CG Power’s revenue to grow 30% year-on-year, and GE Vernova T&D India’s revenue to rise 32% year-on-year, while ABB’s revenue was expected to remain largely flat. It estimated Cummins’ revenue to decline 2% year-on-year, with a margin of about 20.8%.

Nuvama Institutional Equities also highlighted divergence between power-equipment makers and the broader industrial space. It said HV T&D and HVDC-focused companies reported 28% jump in execution, 17% growth in order inflows, and a 640 bps rise in operating margins, with average operating margins at 19.8%. It also flagged multi-year-high order backlogs of ₹1,080,000 crore (₹10.8 lakh crore), up 28% year-on-year, and said export demand forms 25 to 30% of order books for several players.

Market context: power stocks in focus during the session

Power-linked names were active in trade in the provided market note. It said BHEL rose about 4%, while CG Power, Torrent Power, ABB and Hitachi were up 3 to 4%. The note also cited an expectation of stronger summer demand as a supportive factor for sentiment.

A separate note on GE Vernova T&D: capex and order book data

Another research excerpt in the provided material said the company announced additional capex of ₹810 crore (Rs8.1bn) to augment manufacturing capacity of transformers, reactors and AIS/GIS. It also referenced an order book of ₹13,110 crore (Rs131.1bn) and said the stock was trading at a P/E of 65.5x and 52.7x on FY27E and FY28E. The same excerpt mentioned a maintained ‘Accumulate’ rating with a revised target price of ₹3,531, compared with ₹2,706 earlier.

Conclusion: capex pipeline stays central, valuations remain the key debate

Motilal Oswal’s thesis rests on a long domestic capex pipeline, HVDC-led value addition, and export demand supported by global supply constraints. At the same time, it has explicitly acknowledged that sector valuations are not cheap, which is why some calls are selective and Hitachi Energy was moved to ‘neutral’. The next data points for investors, based on the brokerage commentary, will be the pace of order recovery over the next 1 to 2 years and progress on HVDC tenders and execution.