Which Grid Technology Stock Does Goldman Sachs Prefer?
Goldman Sachs remains constructive on India's power transmission and grid technology sector, driven by rising investments in data centres, battery energy storage systems and the country's ongoing electrification programme. While the brokerage has increased target prices for both Schneider Electric Infrastructure and Hitachi Energy India, it continues to favour Schneider Electric Infrastructure due to its stronger growth potential and more attractive valuation.
India's transition towards higher electricity demand, renewable integration and AI-driven infrastructure is expected to create long-term opportunities for companies involved in power transmission and grid modernisation.
Goldman Sachs' Key Views
✅ Maintains Buy on Schneider Electric Infrastructure.
✅ Maintains Neutral on Hitachi Energy India.
✅ Target prices for both companies have been increased.
✅ AI data centres and battery storage are expanding long-term market opportunities.
✅ Higher operating margins support improved earnings outlook.
The brokerage believes India's rapidly expanding electricity infrastructure will require significant investment in transmission equipment, substations, transformers and grid automation over the coming years.
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Brokerage Comparison
| Company | Recommendation | Brokerage View |
|---|---|---|
| Schneider Electric Infrastructure | Buy | Early stage of order growth with attractive valuation. |
| Hitachi Energy India | Neutral | Strong business but valuation limits further upside. |
Why Goldman Sachs Prefers Schneider
- Expected order inflow CAGR of around 31% during FY26–FY29, compared with an earlier estimate of 18%.
- Early phase of its order growth cycle.
- Beneficiary of downstream electrification.
- Attractive valuation compared with sector peers.
- Favourable risk-reward profile.
Why Goldman Sachs Is More Cautious on Hitachi Energy
- Book-to-bill ratio is expected to have peaked in FY25.
- HVDC projects are large and irregular, leading to lumpy order inflows.
- Limited scope for further valuation expansion at current market levels.
- Future earnings growth may moderate after a strong order cycle.
The brokerage expects AI data centres, battery storage systems, renewable energy integration and grid modernisation to remain the major structural growth drivers for the sector over the coming decade.
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Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, observes that India's power infrastructure theme continues to strengthen as investments accelerate in transmission networks, renewable integration, AI data centres and battery storage. Goldman Sachs currently favours Schneider Electric Infrastructure due to its earlier growth cycle and attractive valuation, while remaining more selective on Hitachi Energy India because of richer valuations and moderating order momentum.
Related Queries
- Why does Goldman Sachs prefer Schneider Electric Infrastructure?
- What is the outlook for Hitachi Energy India?
- How will AI data centres benefit India's grid technology sector?
Disclaimer: This article is intended solely for educational purposes and should not be construed as investment advice. Brokerage recommendations may change based on market conditions and company performance. Investors should conduct their own research or consult a SEBI-registered investment adviser before investing.
