Motilal Oswal T&D call: 5 stock targets for FY26

Motilal Oswal reiterates a positive stance on T&D

Motilal Oswal Financial Services (MOFSL) has reaffirmed its positive view on India’s power transmission and distribution (T&D) sector, arguing that the space is supported by multi-year growth tailwinds. The brokerage expects the sector’s growth cycle to be driven by a mix of domestic capex and expanding export markets.

At the same time, MOFSL has acknowledged that valuations across listed T&D names are no longer cheap. Its core argument is that sustained earnings upgrades and export optionality can help justify premium multiples, even after the strong run-up in several capital goods and power equipment stocks.

Coverage actions: Initiations, upgrades, and maintained calls

Based on its latest sector view, MOFSL initiated coverage on three companies: CG Power and Industrial Solutions, GE Vernova T&D India, and Atlanta Electricals. It also reiterated a ‘Buy’ rating on Siemens Energy.

Separately, the brokerage upgraded Hitachi Energy India to ‘Neutral’ and assigned a target price of ₹27,000. The rationale, as stated, is that Hitachi Energy is positioned to navigate sector challenges while benefitting from specific growth pockets such as grid modernization and renewable integration.

Why MOFSL is still constructive despite expensive valuations

MOFSL’s note makes two points in parallel: valuations are elevated, but the earnings environment and market opportunity can keep the rerating intact. It expects an earnings upgrade cycle to continue, aided by a better demand environment and improving order books.

The brokerage also points to export markets as a supporting factor. Alongside domestic capex, export opportunities are seen as an additional demand engine that can help sustain higher multiples in the T&D value chain.

What is driving the T&D capex cycle

MOFSL links the sector’s growth to electrification priorities, renewable energy integration, and grid modernization. It also highlighted that India’s power infrastructure is entering a structural capex cycle.

In this context, the National Electricity Plan (NEP) was cited as outlining nearly ₹9 trillion (about ₹9,00,000 crore) of investment in transmission and distribution infrastructure through 2032. The brokerage also flagged that transformer manufacturers could benefit from an increasing share of HVDC (high-voltage direct current) projects.

Company profiles: CG Power, Hitachi Energy, Siemens Energy

CG Power and Industrial Solutions was described as one of the major sector players. The article data notes a market capitalisation of about ₹75,000 crore and a P/E ratio near 60x, reflecting strong investor confidence. It also highlights CG Power’s execution across industrial automation, power transmission, and railway electrification, with margin improvement aided by cost efficiency and a better product mix.

However, the coverage also flags valuation risk in CG Power. It states that the stock’s high valuation could make it vulnerable to sharp declines if operational issues or cost overruns emerge.

Hitachi Energy India, with an indicated valuation of about ₹33,000 crore, was positioned as a beneficiary of grid modernization and renewable energy integration. Siemens Energy India was noted to have a large order book, indicating sustained demand for its T&D solutions.

Stock moves and target prices highlighted in the report

The brokerage’s target prices and the session’s early trading levels were also cited across the companies in focus. For CG Power, MOFSL initiated coverage with a ‘Buy’ rating and a target price of ₹900 per share. The stock opened at ₹800.05 per share on Tuesday, April 21. In another cited update, CG Power rose 3.45% to ₹801.50 as of 12:23 PM on April 20 and hit a fresh one-year high of ₹804.65. The note also stated this target price implied an upside of over 16% from a previous close of ₹774.

For Atlanta Electricals, MOFSL maintained a ‘Buy’ rating with a target price of ₹1,650. The stock opened nearly 2% higher at ₹1,429.45 on Tuesday. The company was described as being in transition from a low-voltage transformer manufacturer to a high-voltage transformer player.

For GE Vernova T&D India, MOFSL assigned a ‘Buy’ rating with a target price cited as ₹4,740 per share in one place and ₹4,750 per share in other cited excerpts. The stock opened at ₹4,250.

For Siemens Energy India, MOFSL retained a ‘Buy’ rating with a target price of ₹3,700. The stock opened higher at ₹3,227.05.

Hitachi Energy India was upgraded to ‘Neutral’ with a target price of ₹27,000.

Key numbers at a glance

Risks and constraints flagged by the brokerage

MOFSL highlighted several risks to its thesis. These included lower-than-expected order inflows, intensified competition from domestic and Chinese players, and a surge in commodity prices.

For CG Power specifically, the commentary also pointed to downside sensitivity if operational issues or cost overruns arise, given the stock’s premium valuation.

Why this matters for investors tracking the power equipment cycle

The brokerage’s note reinforces a broader market narrative around a multi-year capex cycle in power infrastructure and the associated order inflow opportunity for equipment makers and solution providers. It also underlines that, while the structural demand outlook is favourable, current valuations require closer attention to execution, backlog quality, and margin trajectory.

In the near term, MOFSL also flagged that ordering activity could see moderation because of capacity constraints, but it expects a recovery over the next one to two years as manufacturing capacities expand.

Conclusion

Motilal Oswal’s latest sector view keeps India’s T&D theme firmly in focus, combining a positive long-term demand outlook with a clear warning that valuations are elevated. The brokerage’s actions include new coverage initiations (CG Power, Atlanta Electricals, GE Vernova T&D India), a maintained ‘Buy’ on Siemens Energy, and a ‘Neutral’ upgrade on Hitachi Energy with a ₹27,000 target price. The next key monitorables remain order inflows, project execution, and how quickly capacity additions ease supply-side constraints over the coming quarters.