Kante described the latest quarterly earnings of power sector players as a “decent set of numbers”, adding that “Hitachi’s numbers were also very good, but there were some flips as expected by the market.” He pointed out that transmission and distribution projects—particularly those involving HVDC—are long-gestational in nature. Because of this, quarterly performance may appear uneven. “There will be some quarters that are lumpy and slow-tempered, so that’s the nature of the business,” he explained.
However, Kant flagged the evaluative coefficient as a primary concern. Many companies in the transmission and distribution segment are trading at elevated levels. “If you extrapolate the figures to FY30 as well, (it) looks completely discounted,” he said. However, he maintained that long-term investors who believe in infrastructure expansion of the national grid will get value: Power Grid’s capital expenditure plan of ₹30,000 crore over the next few years, with an additional ₹50,000 crore later, will underline the runway for growth. “If you don’t have… for valuation multiples, both Hitachi Energy as well as Siemens Energy look very attractive… but from a long-term perspective,” he added.
Delays in execution continue to plague parts of the sector. Kant attributes this to issues such as land acquisition constraints and environmental clearances. Citing NTPC Green’s delayed project timeline, he said, “This was the kind of problem last year… not just the companies laying these conductors or the equipment manufacturers, but the IPPs too. While reforms are underway, he cautioned investors to watch out for volatility and focus on the broader structural picture.”
On the regulatory overhang in the power trading ecosystem, Kant expects more competition to reshape the landscape. “Almost all the monopolies they used to enjoy… won’t be there,” he noted. As more players enter day-ahead, term-ahead and real-time markets, it sees tariffs becoming increasingly negotiable. As a result, the stock in question appears “fairly valued at current price levels,” with a move of around 5-10% depending on news flow.
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Turning to the broader capital goods space, Kant expressed disappointment over the latest figures from companies such as ABB and Siemens. “The expectation was with all these structural tailwinds … things should start looking up,” he said. But private investment has stagnated, and fatigue remains in the electronics, electrification and industrial segments. He suggested revisiting the sector only after Q4, once there is clarity after the budget. Although valuations are still elevated, he believes there is no reason to chase these stocks immediately.
In contrast, Kant remains enthusiastic about conservation counters. “Certainly, we like all the defense counters … any decline can be bought,” he said. The shift from India being just an offset partner to an OEM-driven, Make in India-driven defense ecosystem is a long-term structural opportunity. Kant expects 64% of defense equipment to be manufactured locally in the next three to four years, backed by a swelling order book with a book-to-bill ratio as high as 4-5 times. He highlighted HAL and BEL as top picks, estimating HAL and BEL to reach ₹1,000 per share based on FY27 earnings. “Definitely a must in your portfolio, we recommend a 10-15% allocation,” he added.
As global supply chains reset and India intensifies its infrastructure push, the interplay of strong demand, delayed execution and sharp valuations will continue to shape investor sentiment in power, capital goods and defense – each sector moving at its own pace in the country’s broader growth narrative.
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