Power transmission stocks: Citi’s 4 picks for FY36 grid

Why Citi turned bullish on transmission equipment

Shares of power transmission equipment makers rallied after Citi initiated coverage on the sector, arguing that transmission infrastructure is becoming a binding constraint in the global energy transition. The brokerage linked the theme to rising investments in renewable energy, electric vehicles, new manufacturing capacity and power-hungry data centres. Citi’s central point was that generation additions alone are not enough, because power evacuation and grid stability increasingly depend on transmission and distribution (T&D) networks. It also flagged persistent bottlenecks across global grids and highlighted a continuing demand-supply mismatch in transformers. That imbalance, according to the note, is expected to persist for the next few years and could run through 2028.

The “bottleneck” thesis: renewables need more grid

Citi’s note also reflected a structural shift in network needs as power systems add more renewables. One factor cited was that renewable energy systems require roughly two times more transmission than coal-based systems, increasing the need for new lines, substations, transformers and grid-balancing equipment. The brokerage linked this to worsening grid bottlenecks globally, which in turn supports a longer capex cycle for T&D infrastructure. In that context, high-voltage (HV) and high-voltage direct current (HVDC) systems feature prominently because they are typically used for long-distance evacuation and large renewable corridors.

The size of the global opportunity

Citi cited BloombergNEF estimates that global capital expenditure on transmission and distribution networks could total nearly $15 trillion between 2025 and 2050. The brokerage tied this to accelerating electrification and the changing load profile from data centres and industrial demand. In Citi’s framing, the scale of global spending matters for Indian manufacturers not only because of domestic grid buildout, but also because of export opportunities in a tight global equipment market.

Why India is positioned differently

A key support for the sector call was India’s manufacturing role in the T&D supply chain. Citi said India accounts for around 80% of global production in this segment, giving local companies a platform to serve both domestic and overseas demand. The brokerage also pointed to localisation policies, certification requirements and technology intensity as barriers to entry, particularly in HVDC. In practice, Citi’s initiation note focused investor attention on a narrow group of listed equipment makers that have the capabilities and credentials to bid for large projects.

The domestic grid buildout: FY36 renewable integration

Citi highlighted the Central Electricity Authority’s roadmap for integrating 900 GW of renewable energy capacity by FY36. It said the plan is expected to drive sustained investments in HV and HVDC transmission infrastructure over the next several years. The brokerage also referenced India building about 80 GW of HVDC lines by FY36 as part of the plan. On spending, Citi cited the CEA’s transmission plan at approximately ₹7.9 lakh crore (₹7.9 trillion) through FY36, while another coverage update referenced a broader transmission investment plan of about ₹9.7 lakh crore (₹9.7 trillion).

HVDC as a focused profit pool for OEMs

Citi estimated that the HVDC segment alone could represent a business opportunity worth around ₹1.6 trillion (₹1.6 lakh crore) for equipment manufacturers and suppliers. It described meaningful barriers to entry, supported by localisation norms and certification requirements. Citi’s preference within the sector leaned toward companies with established HVDC leadership, higher probability of near-term project wins and strong export positioning. It also linked the outlook to persistent transformer shortages and the likelihood of increased global sourcing of HVDC equipment.

Stocks in focus and how they moved

Thursday’s move was sharp across the coverage universe. Hitachi Energy India was highlighted as a top gainer, while GE Vernova T&D India and CG Power also rose. Updates cited that, around 11:45 am, Hitachi Energy India was up 5.6% at ₹37,175, GE Vernova T&D India rose 2.7% to ₹5,100, and CG Power climbed 4.1% to ₹944. Another update said that by 11:11 IST, all four names in the initiation set were up 2.7% to 5.4% on the NSE. Hitachi Energy India also ended a session 4.22% higher at ₹36,700.

Citi’s ratings, targets, and implied upside

Citi initiated with a positive stance on three of the four names, and a neutral view on one. It began coverage with ‘Buy’ ratings on Hitachi Energy India, GE Vernova T&D India and CG Power and Industrial Solutions, along with a ‘Neutral’ rating on Siemens Energy. For Hitachi Energy India, Citi assigned a target price of ₹46,700 per share, described as implying about 25% upside (and also referenced as over 26% upside in one note). A separate coverage update cited Citi’s implied upside estimates at about 33% for Hitachi Energy, 25% for GE Vernova T&D, 21.3% for CG Power and 8.5% for Siemens Energy.

Company-specific datapoints investors tracked

Beyond the initiation call, the broader news flow included operational updates that investors have been watching. After its Q4FY26 results, Hitachi Energy India cited a strong multi-year growth outlook driven by rising power demand, renewable integration, electrification and data centre expansion. It reported a total order backlog of ₹29,555 crore in Q4FY26 and said it has secured over ₹20,000 crore worth of HVDC orders. The company also said it is executing two mega 6-gigawatt HVDC projects, Khavda-Nagpur and Bhadla-Fatehpur. It announced additional capex of ₹2,000 crore for its Vadodara transformer facility, taking cumulative announced investments to ₹4,000 crore.

GE Vernova T&D India, in an update dated May 18, 2026, said it delivered a strong year with record order bookings and execution. It reported that Q4FY26 order inflows jumped 188% year-on-year to ₹8,610 crore, driven by large renewable evacuation and HVDC transmission projects. Separately, Siemens Energy pointed to strong demand momentum in India, tied to electrification, decarbonization and energy security priorities, alongside export opportunities.

What the market is pricing in

The initiation landed after significant rallies already reported in the names. Figures cited alongside the coverage update showed one-year gains of about 88% for Hitachi Energy India, about 116% for GE Vernova T&D India and nearly 37% for CG Power. A separate update also referenced six-month gains of about 102% for Hitachi Energy, 62% for GE Vernova T&D, and around 46% each for CG Power and Siemens Energy. Citi’s note argued that, despite the run-up, the multi-year transmission buildout and HVDC adoption can keep the addressable market large for select OEMs, particularly where export demand and capacity expansion are supportive.

Conclusion

Citi’s initiation call put the spotlight back on transmission as a practical constraint in the energy transition, especially as renewable capacity scales and electricity demand rises. The brokerage’s thesis combined a long global T&D capex runway, a tight transformer market expected to extend toward 2028, and India’s manufacturing footprint in T&D equipment. In the near term, investor attention is likely to remain on project wins, execution on large HVDC corridors, and how quickly capacity additions translate into deliveries and order backlogs as the FY36 renewable integration plan progresses.