Crisil Ratings said that it has taken note of the Rs 2,520.82 crore equity raised by Hitachi Energy India through qualified institutional placement (QIP), which concluded on 13 March 2025.

The raised funds will be utilised mainly towards capital expenditure (capex) of Rs 2,000 crore announced by the company in October 2024 for expanding its capacity and product portfolio across the large and small power transformers, dry and traction, high-voltage direct current (HVDC) and components and network control solutions offering; this is expected to be taken over the next 4-5 years.

Of the QIP proceeds, the funds utilized for capex would be Rs 1513.28 crore, Rs 350 crore will be utilised towards working capital requirement and the remaining for general corporate purposes.

The funds raised will further strengthen the already robust financial risk profile of the company with high networth, low debt levels and strong debt protection metrics.

The rating continues to reflect healthy business risk profile of the company, driven by its strong market position in the power grid segment, diversity in product portfolio and geographical reach and strong clientele.

The rating additionally factors in strong support from the ultimate parent Hitachi Ltd that holds nearly 100% stake in Hitachi Energy (effective December 2022), which in turn is the holding company of Hitachi Energy India Limited.

Operating income stood at Rs 4,501 crore for the nine months ended December 31, 2024 (on-year growth of 27%) with operating margin at 7.95% (compared to 4.7% in the similar period last fiscal). The margin improved on account of healthy order inflow, better operating leverage and higher input price pass-through abilities. Crisil Ratings expects the margin to further increase in the near to medium term, basis better operating efficiency.

The company has also maintained strong business risk profile, driven by its established market position and highest-ever order book of Rs 18,994 crore as on 31 December 2024 (September 2024: Rs 8,539 crore).

Liquidity is strong, marked by unencumbered cash equivalent of approximately Rs 900 crore as on 31 December 2024, and access to fund-based bank limit of Rs 952 crore that remains unutilized as on 31 December 2024.

These strengths are partially offset by susceptibility to capital investment cycles and project implementation risk arising from structural issues in the power sector and intense competition in the capital goods industry.

Hitachi Energy India Limited provides product, system, software, and service solutions across the power value chain. The portfolio includes an extensive range of high-voltage products, transformers, grid automation products and power quality products and systems.

The scrip rose 0.54% to currently trade at Rs 12186.40 on the BSE.