Wood highlighted this change in his “Greed & fear” note on Friday, September 25.
Citing the demand representation made by the management of Hitachi Energy India at the recently concluded Jefferies India Conference, Wood wrote in his note that Hitachi Energy India is a “picks and shovels” play on the transmission theme in India.
The management of Hitachi Energy India, in their presentation at the conference, stated that the total final energy demand is likely to increase by 50% and the electricity demand is set to grow by 100% by 2035.
Wood wrote in his note that the market has already understood the transmission theme, which is why it has rewarded Hitachi Energy India’s stock price, with a 68% surge year-to-date, which has taken its 12-month forward price-to-earnings multiple to 71 times.
“Still, at a time when India has been out of favour on the reverse AI perception, it is worth reminding non-specialists that India continues to enjoy its own structural growth story, which will prove resilient at a time when the current near all-consuming focus on AI diminishes,” Wood wrote in his Greed & fear.
Jefferies has a “buy” rating on Hitachi Energy India with a price target of ₹45,790, which is the second-highest price target on the street for the stock.21 analysts have coverage on Hitachi Energy India, of which 13 have a “buy” rating on the stock, six say “hold”, and two others have a “sell” rating on the stock. The consensus estimate of price targets are implying an upside potential of 20.5% from current levels.
Shares of Hitachi Energy India are trading 1.7% higher on Friday at ₹31,230. The stock is down 6% so far this month.