Kant described the latest quarterly earnings from power sector players as a “decent set of numbers,” adding that “even Hitachi numbers were very good, but as per market expectation there were some flips out there.” He pointed out that transmission and distribution projects—particularly those involving HVDC—are long-gestation in nature. Because of this, quarterly performance can look uneven. “There will be some quarters which would be lumpy and slow in nature, so that is the nature of the business,” he explained.
However, Kant flagged valuation multiples as the primary concern. Many companies in the transmission and distribution segment are trading at elevated levels. “If you even extrapolate the numbers to FY30, [it] seems to be fully discounted,” he said. Yet, he maintained that long-term investors who believe in the structural expansion of the national grid will find value: Power Grid’s capital spending plans of ₹30,000 crore over the next few years, along with an additional ₹50,000 crore later, underline the growth runway. “If you do not have a… for valuation multiples, then both Hitachi Energy as well as Siemens Energy looks pretty attractive… but from a long-term period,” he added.
Execution delays continue to plague parts of the sector. Kant attributed this to issues like land acquisition hurdles and environmental clearances. “Last year was such kind of a problem… not only faced by this conductor laying companies or the equipment making companies, but also the IPPs,” he said, citing NTPC Green’s delayed project timelines. While reforms are underway, he cautioned investors to stay mindful of volatility and focus on the broader structural picture.
On regulatory overhang in the power trading ecosystem, Kant expects more competition to reshape the landscape. “Almost all sort of a type of monopoly they enjoyed… will not be there,” he noted. With more players entering day-ahead, term-ahead, and real-time markets, he sees tariffs becoming increasingly negotiable. As a result, the stock in question appears “fairly valued at current price levels,” with movement of about 5–10% likely depending on news flow.
Turning to the broader capital goods space, Kant expressed disappointment over the latest numbers from companies like ABB and Siemens. “Expectation was with all these structural tailwinds… things should start looking up,” he said. But private capex remains stalled, and fatigue persists across electronics, electrification and industrial segments. He suggested revisiting the sector only after Q4, once there is clarity post-Budget. With valuations still elevated, he believes there is little reason to chase these stocks immediately.
In sharp contrast, Kant remains enthusiastic about defence counters. “Definitely, we like all the defence counters… any declines are to be bought into,” he said. The shift from India being merely an offset partner to becoming an OEM-driven, Make in India–powered defence ecosystem is a long-term structural opportunity. Kant expects 64% of defence equipment to be domestically manufactured in the next three to four years, supported by swelling order books with book-to-bill ratios as high as 4–5 times. He highlighted HAL and BEL as top picks, projecting HAL to reach ₹1,000 per share based on FY27 earnings. “Definitely a must in your portfolio, 10–15% allocation is what we have been recommending,” he added.
As global supply chains realign and India intensifies its infrastructure push, the interplay of robust demand, delayed execution and steep valuations will continue to shape investor sentiment across power, capital goods and defence—each sector moving at its own pace within the country’s broader growth narrative.
