Hitachi Energy India and Thermax won rating upgrades from PL Capital on Thursday, as brokerages reposition for a capital goods rebound driven by order backlog execution and post-correction entry valuations.
Larsen & Toubro and Bharat Electronics retained their positive tags. Order pipelines across power transmission, heavy infrastructure, and state-backed defence procurement remain packed. Valuations had simply run ahead of reality. Now, institutional money managers are stepping back in.
"They maintained their guidances, but I think they'll easily surpass all these numbers," said Amit Anwani, Vice President of Institutional Research at PL Capital.
| Company | Coverage Stance | Key Financial Metric / Catalyst | Order Book / Sector Pipeline |
|---|---|---|---|
| Hitachi Energy India | Upgraded to Buy | 64% revenue jump; 16.5% adj. EBITDA margin | ₹33,000 crore order backlog |
| Thermax | Upgraded to Buy | Q4 margin recovery from pricing actions | Near-term raw material cost drag easing |
| Larsen & Toubro | Positive Outlook | >15% revenue growth; stable margins | Targets >10% inflow & top-line growth |
| Bharat Electronics | Preferred Defence Pick | Steady quarterly print; margin resilience | QRSAM contract clearance eyed before March |
| Shipbuilding Cohort | Long-Term Positive | Soft quarterly print on revenue lag | ₹70,000 crore defence clearances in pipeline |
Hitachi Energy India delivered a 64% top-line surge in its latest operating quarter. Adjusted operating margins reached 16.5%. More critically, the company pushed its total order book to nearly ₹33,000 crore, insulated by sticky base orders and upcoming mega-tenders.
A steep pullback in the stock price opened the entry door. High-voltage direct current transmission awards across inter-regional green energy corridors will anchor institutional demand over the next two to three years. The operational numbers matched the valuation rerating.
Very strong commentary, and they continue to deliver strong numbers," Anwani said of Hitachi Energy.
Larsen & Toubro faces scrutiny after the Karnataka state government moved to blacklist the engineering giant over execution delays tied to the Jal Jeevan Mission rural water initiative. The market flinched. PL Capital did not.
The exposure is minimal. L&T's consolidated book dwarfs single-state municipal water schemes. The company generated over 15% revenue growth in its latest figures while defending core operating margins and liquidity. Management officially guided for over 10% expansion in order inflows and top-line growth through fiscal 2027. Anwani argued that L&T will exceed that threshold with room to spare.
Market Context: Capital expenditure across India's industrial belt is pivoting from raw capacity buildouts to execution-heavy power evacuation and aerospace manufacturing. Even when input costs pressure short-term earnings, long-cycle contractors with balance sheet strength pass expenses downstream within two quarters.
Bharat Electronics commands Anwani's highest conviction in the aerospace and military systems space. Order books across state-run defence electronics players held steady, but terminal cash flow hinges on cabinet clearances. The immediate trigger is regulatory: management expects official clearance for the Quick Reaction Surface-to-Air Missile system before March.
Hindustan Aeronautics posted stable performance, while public-sector shipbuilders weathered a softer operational quarter. Yet naval yards stand to capture allocations from a ₹70,000 crore defence procurement pool cleared by the government.
Thermax, Triveni Turbine, and Cummins India absorbed margin hits from expensive raw materials. That squeeze should lift by March. Contract revisions and end-product price hikes will filter through to audited earnings by the fourth quarter, turning Thermax's sharp share price correction into a calculated institutional buying window.