ITM Power Captures Hydrogen Revaluation Wave with Government Grant, Index Inclusion, and Record Revenues

ITM Power secures £46.5M grant for Chronos electrolyser; MSCI inclusion to drive passive inflows; revenue guidance raised to £43M, cash buffer strong at £200M.

The rally in ITM Power’s shares has been nothing short of extraordinary. Over the past three months, the stock surged 164% in London – outstripping every major hydrogen-sector peer. Ballard Power climbed 163% in the same period, Plug Power added 105%, while NEL ASA lagged at 70% despite a brief intraday spike in Oslo. Analysts describe the move not as a second hydrogen bubble, but as a selective revaluation: investors are now discriminating sharply between companies with tangible delivery records and those still chasing promises. ITM Power sits firmly in the former camp, and the market is rewarding it accordingly.

That reward is about to intensify. On Tuesday, the British electrolyser manufacturer received formal confirmation of a £46.5 million state grant, part of a broader government package worth £86.5 million – including £40 million from Great British Energy. The funds will go toward a fully automated production line in Sheffield for the next-generation Chronos electrolyser, which promises three times the power output of the current model at 40% lower capital costs and half the footprint. Management said it would take a final investment decision immediately after the grant announcement, with commercial production targeted for 2028. The timing is no coincidence: on 29 May, ITM Power will join the MSCI United Kingdom Small Cap Index, forcing passive funds to buy the stock. With a market capitalisation of roughly £1.11 billion, the index-driven inflows could prove a powerful technical tailwind.

Operationally, the company is making measurable progress. In the first half of fiscal 2026, ITM Power posted a record revenue of £18 million and lifted its full-year guidance to between £40 million and £43 million – a jump of around 35% year-on-year. The adjusted EBITDA loss narrowed to £11.9 million from £16.8 million in the prior-year period, although the pre-tax loss for the last completed financial year widened to £45.4 million. The order backlog stands at £152 million, with 71% of contracts classified as profitable – a stark break from the earlier, less disciplined portfolio. Crucially, liquidity is not a near-term concern. With almost £200 million in cash and zero debt, analysts see no need for a capital raise before the end of the decade, giving the company a comfortable buffer while it works toward breakeven.

Project wins are bolstering the narrative internationally. At the World Hydrogen Summit & Exhibition 2026 in Rotterdam, the REFHYNE-2 project – a 100-megawatt electrolyser for Shell’s Energy and Chemicals Park Rheinland near Cologne – collected two awards: Clean Hydrogen Project and Industrial Application. From 2027, the plant is expected to produce up to 44,000 kilograms of renewable hydrogen daily, partly decarbonising fuel production at Shell’s Wesseling refinery. In the UK’s Humber region, ITM Power secured planning permission in March 2026 to supply six POSEIDON electrolyser modules for Uniper’s 120-megawatt Humber H2ub project, with potential expansion beyond 200 megawatts. A final investment decision is expected later this year, and commercial operations are scheduled for 2029.

Analyst views on the stock remain sharply divided. Morgan Stanley recently raised its price target to 170 pence, well above the consensus average of around 101 pence. Berenberg lifted its target to 110 pence, citing the state-backed Chronos financing as a key catalyst. Insider buying has reinforced the bullish camp, but the broader consensus stays cautious. The upcoming annual results will test whether revenue growth, cash reserves, and contract quality confirm a genuine turnaround – or whether the stock’s meteoric rise has run ahead of fundamentals. For now, ITM Power has seized the moment, riding a wave of selective revaluation that the hydrogen sector has not seen in years.