Hitachi Energy and GE Vernova T&D India saw significant gains on the BSE, climbing 5% and 6% respectively, as market analysts from Nomura described the recent sell-off in power-equipment stocks as an overreaction. The market's response followed a government order exempting certain Chinese manufacturers from procurement restrictions, which some perceived as a competitive threat.
On the BSE, Hitachi Energy rose to Rs 32,448, while GE Vernova T&D India surged to Rs 4,647. Other notable gains included CG Power, which advanced more than 3% to Rs 925, Siemens Energy, which gained over 4% to Rs 3,434, and Cummins India, which added more than 2% to Rs 5,590. Despite the market's initial reaction, Nomura outlined four reasons why the sell-off was unwarranted.
Nomura's analysis of transmission-related tenders from FY09 to FY20 revealed that the four Chinese manufacturers exempted from India's procurement restrictions secured only 9% of contracts. This low market share, despite unrestricted bidding, suggests that factors beyond security clearances have limited their participation.
“The order explicitly states it creates no precedent. Market players read it as a competitive threat and sold off listed power-equipment stocks.”
Nomura analysts
The brokerage noted that the capacity constraints of these exempted companies limit their ability to benefit from the relaxed norms. TBEA Energy (India) is the only company operating near optimal capacity, while others like Nanjing Electric India and Taikai Electric India show signs of underutilisation.
Nomura emphasized that the exemption is a temporary measure, valid for two years, and not indicative of a broader policy shift. The exemption is unlikely to be extended given the strategic importance of power infrastructure and ongoing border tensions with China.
The limited two-year scope of the exemption provides little incentive for the exempted companies to invest in expanding their manufacturing capacity in India. Nomura expects these companies to focus on utilizing existing capacity rather than large-scale expansion.
Background
India's trade deficit with China reached an all-time high of $112.6 billion in 2025-26, highlighting the complex economic relationship between the two nations.
Looking ahead, investors should monitor how these companies adapt to the temporary exemption and whether domestic players can capitalize on the situation. The evolving geopolitical landscape will also play a crucial role in shaping future market dynamics.
