ITM Power's £86.5m War Chest Can't Shield the Stock From a Sector-Wide Rout

ITM Power locks down £86.5M in grants and equity for 1-GW electrolyser expansion, yet shares fall 52% from highs amid broader hydrogen sector downturn.

The disconnect between corporate milestones and market reception is rarely starker than at ITM Power right now. The British electrolyser manufacturer has locked down nearly £87 million in fresh funding, secured a government grant for its next-generation technology, and is scaling its Sheffield factory toward a 1-gigawatt annual capacity. Yet its share price continues to slide, caught in a downdraft that has swept across the entire hydrogen sector.

On Friday, the stock fell another 3.01 percent to €1.22, extending a decline that has now erased roughly 52 percent from the 52-week high of €2.58 reached as recently as late May. The prior session was even steeper, with a 4.90 percent drop taking the shares to €1.26. Despite the recent pain, the year-to-date performance remains striking — a gain of 69.18 percent, or 74.43 percent depending on the measuring point, reflecting just how far the stock had climbed from its lows.

Government Backing Solidified

The sell-off arrived in a week that should have been cause for celebration. The UK Department for Energy Security and Net Zero (DESNZ) has formally released a £46.5 million grant for the development of ITM Power's "Chronos" electrolyser stack, the company's next-generation platform. First flagged in April, the funding has now cleared all remaining regulatory hurdles and, crucially, does not need to be repaid.

That sum sits alongside a strategic equity investment of £40 million from Great British Energy, the state-owned investment vehicle. Together, the two injections give ITM Power £86.5 million to accelerate its industrial expansion. The British government now holds a 10.4 percent stake in the company through the investment.

Sheffield's 1-Gigawatt Ambition

The capital is being deployed directly into the company's manufacturing base in Sheffield, where ITM Power is building out custom, automated production lines for catalyst-coated membranes, electrode welding, and stack assembly. The goal is to reach an annual production capacity of 1 gigawatt, a scale that management expects will drive down unit costs and improve energy efficiency.

The company is also broadening its industrial partnerships. In late June, it signed a memorandum of understanding with DB Systemtechnik, a subsidiary of Deutsche Bahn, to explore green hydrogen solutions for rail transport and critical infrastructure. A feasibility study is planned to assess how ITM's electrolysers could be integrated at railway sites.

On the project execution front, the 100-megawatt Lingen-1 PEM plant is being commissioned, with Lingen 2 — another 100 megawatts — already in the pipeline. The order book stood at roughly £152 million at last count, and management has guided for revenue between £35 million and £40 million for the current financial year. Whether that target was met or exceeded in the final quarter will be revealed when the audited preliminary results are published in mid-August.

Analyst Optimism Meets Chart Reality

The technical picture offers little comfort for bulls. The 14-day relative strength index has dipped to 39.5, edging into oversold territory, though a separate reading puts it at 41.3 — close but not quite there. The stock is trading above its 200-day moving average of €1.09 but well below the 50-day average of €1.61, a configuration that underscores the severity of the two-month correction.

Analysts, however, remain broadly constructive. Six of the ten covering the stock rate it a buy, with a consensus price target of roughly €1.55 — about 23 percent above current levels. That fundamental optimism stands in sharp contrast to the market's recent behaviour, which has been shaped more by disappointing results from international peers than by ITM Power's own progress.

The sector-wide malaise has been relentless, and ITM Power has not been spared. Investors are now marking time until mid-August, when the annual report will provide a clearer picture of the order book trajectory, the Lingen project's advancement, and whether the government's £86.5 million bet can begin to close the gap between analyst targets and the stock's trading price.