Nuvama Institutional Equities, in its latest note on capital goods and power equipment names such as BHEL Ltd, CG Power, Siemens and Voltamp, said high-voltage transmission and distribution companies continued to report strong execution in the June quarter even as ordering growth began to slow. The brokerage said aggregate revenue for HV T&D players rose 41.9 per cent year-on-year (YoY) in the quarter, while operating margins expanded 220 basis points to 21.5 per cent. Order inflows increased by a slower 11.1 per cent YoY, it said adding that a rising supply could pose margin risks over the next 18 to 24 months.

Nuvama said valuations across power and non-power peers remained stretched at 50 to 60 times estimated FY28 earnings per share (EPS), and on that basis it preferred Voltamp Ltd at 25 times FY28E and Bharat Heavy Electricals Ltd (BHEL) at 30 times FY28, citing recovering margins and execution-led growth. The domestic brokerage said Larsen & Toubro Ltd (L&T) looked attractive for long-term growth after the resolution of the West Asia crisis. It remained positive on Siemens Energy and CG Power within the HV T&D space.

"We prefer VAMP due to early margin recovery and capex led runway of growth from a combination of industrial capex, RE and data centres. While ABB, Siemens and Cummins all benefit from the same growth drivers valuations remain restrictive. We also prefer BHEL on operating leverage driven margin recovery in FY27,’ it said.

For Voltamp, Nuvama suggested a target of Rs 12,000. The target for BHEL is set at Rs 530. The brokerage suggested a target of Rs 4,065 on L&T.

Targets for Hitachi, Siemens Energy

It suggsted a target of Rs 3,483 on Siemens Energy, 35,400 on Hitachi Energy, Rs 1,000 on CG Power, Rs 4,635 on GE T&D and Rs 455 on KEC International.

On the power side, the brokerage said India’s transmission and distribution cycle remained robust, supported by the Central Electricity Authority’s 900GW non-fossil roadmap by FY36, which implies transmission capex of Rs 7.93 lakh crore. It said this provided visibility for transformers, GIS, HVDC equipment and transmission EPC players. However, it added that near-term upside was likely to remain capped because ordering was plateauing and HVDC visibility beyond Barmer in FY27 and Lakadia–Alephata in FY28 remained limited.

Nuvama said it remained structurally positive on HV T&D because of strong backlog-led execution visibility, upcoming HVDC awards and a robust demand environment. Within the segment, it said it preferred Siemens Energy and CG Power, where stronger operating performance and multiple options could offer scope for a positive surprise, while peak valuations limited room for disappointment for GVTD and Hitachi Energy. It added that large HVDC optionality remained the key near-term trigger for either GVTD or Hitachi Energy, depending on who wins the Barmer HVDC order.

Beyond power, the brokerage said demand was reviving across non-power industrial names. It said enquiries were improving in metals, oil and gas, commercial real estate, data centres, semiconductors and electronics, supported by the RBI’s CUF remaining above 75 per cent in Mar-26. Management commentary and project pipelines, it said, pointed to early signs of a broader recovery, with H2FY26 BSE500 capex accelerating to around 15 per cent year-on-year, although it remained watchful for a wider rotation into private capex names as the recovery gathered pace.

In non-power industrials, Nuvama said revenue growth improved to 14.8 per cent year-on-year, but margins contracted by 320 basis points year-on-year to 11 per cent because of commodity inflation. Even so, it said ordering momentum was stronger, with base inflows rising 21.5 per cent year-on-year, and the pick-up had now continued for three straight quarters, helped by demand across data centres, metals, oil and gas, and renewables.

Overall, the brokerage said HV T&D companies were still delivering strong execution, but slower ordering and the possibility of fresh supply could weigh on margins over time. It said it preferred Voltamp and BHEL among names offering valuation comfort and margin recovery potential, stayed positive on Siemens Energy and CG Power in HV T&D, and continued to await a broader upcycle in private capex across core industries, with data centre spending providing an added tailwind.