ITM Power: £86.5m in State Grants Can't Substitute for Signed Contracts

ITM Power secures £86.5M in UK government funding for automated electrolyser gigafactory, but stock falls as market awaits finalised commercial agreements and concrete orders.

The British electrolyser maker has secured nearly £87 million in government backing for its automated gigafactory, yet the market is demanding something more tangible: finalised commercial agreements. ITM Power shares closed Wednesday at €1.35, up 3.85% from Tuesday’s €1.30, but that modest bounce masks a broader technical deterioration. The stock recently broke below its 100-day moving average of €1.34 — a level that had provided support — and the annualised 30-day volatility now exceeds 105%, a figure more typical of crypto than a manufacturing business.

On July 9, the UK Department for Energy Security and Net Zero formally confirmed a £46.5 million grant for ITM’s Chronos production line in Sheffield, adding to the £40 million equity injection from Great British Energy received in April. Combined, the £86.5 million will fund a fully automated facility capable of turning out one gigawatt of electrolyser stacks each year. Yet the announcement failed to arrest the sell-off. A day earlier, rival Plug Power had taken a final investment decision on a 50-megawatt PEM electrolyser project in Australia — a concrete, signed deal that ITM Power cannot yet match.

The stock has lost nearly half its value since hitting a 52-week high of €2.58 on May 29, though it has more than doubled from a February low of €0.65. Year to date, the shares still show a gain of 86%. The 50-day moving average sits at €1.69, well above the current price, while the 200-day average of €1.08 offers a distant floor. The relative-strength index of 42.9 points to a cooling but not oversold asset.

ITM’s pipeline remains heavy on memoranda of understanding and light on binding orders. The Cromarty green-hydrogen project with Protium in the Scottish Highlands is a first-phase 15-megawatt development, but its final investment decision is not expected until December 2026. A separate partnership with Germany’s Stablegrid Group encompasses two energy-infrastructure schemes with a combined electrolyser capacity of 710 megawatts; the first decision on those should come this year. Additionally, the company’s strategic alliance with Rheinmetall, announced in April under the “Giga PtX” banner, is positioned as a long-term industrial partnership rather than an immediate order.

None of this negates the operational progress. In the first half of fiscal 2026, ITM posted record revenue of £18 million, driven by plant sales, while its gross loss narrowed to £6.5 million from £10.2 million a year earlier. The order book expanded to £152 million, with 71% of those contracts now considered profitable — a marked improvement from the low-margin legacy agreements. The company also holds about £197.8 million in cash, according to its latest interim report.

Yet the market is in no mood to reward balance-sheet strength alone. A broad consolidation has swept across hydrogen names, and even rising oil prices — which might normally trigger a rotation into alternatives — have failed to stem the selling. The next chance for a re-rating comes August 12, when ITM Power releases its full-year results.

For now, the stock remains a wager on the sector’s narrative rather than its execution. If Cromarty and the Stablegrid projects reach final investment decisions — and if the Chronos line ramps without major cost overruns — the picture could change decisively. Until then, state grants can build the factory, but only signed contracts will rebuild the share price.