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L&T has deferred its plan to expand electrolyser manufacturing capacity to 1GW at Hazira

ICICIdirect Research 07 Sep 2026 DISCLAIMER

News: L&T has deferred its plan to expand electrolyser manufacturing capacity to 1GW at Hazira, Gujarat, amid weaker-than-expected green hydrogen demand. The expansion, initially planned by March 2027 with ₹450–550 crore capex, has been deferred from the current 400MW capacity; L&T has already invested ₹293 crore and can scale to 1GW within 12–18 months as demand improves. The company has secured a 96MW electrolyser supply order for Indian Oil’s Panipat project and commissioned a 1MW electrolyser at Kandla, while green hydrogen prices have fallen to ₹279–336/kg from >₹397/kg in 2025. LTEL has also been allocated PLI support for 300MW p.a. electrolyser supply for five years under the ₹4,440 crore SIGHT programme.

View: The deferral is near-term negative for L&T’s electrolyser business, reflecting slower-than-expected offtake despite declining green hydrogen costs. However, the decision limits near-term capital deployment while retaining the ability to scale capacity within 12–18 months; India’s target of 5MTPA green hydrogen production by 2030 and the ₹4,440 crore SIGHT programme provide a structural demand opportunity, subject to faster execution of green hydrogen, ammonia and methanol projects.

Impact: Neutral

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