ITM Power’s Two-Front Battle: State Funding and a New Partnership Can’t Stem a 27% Weekly Decline

ITM Power receives £40M from Great British Energy and raises liquidity guidance, yet stock falls 27% as market eyes June milestones on grant approval and hydrogen contracts.

The disconnect between corporate progress and market sentiment seldom looks starker than at ITM Power this week. The Sheffield-based electrolyser specialist announced a £40 million equity injection from Great British Energy, struck a joint venture with Protium Green Solutions, and raised its liquidity guidance — yet ended the week nursing a near-27% loss. By Friday’s close at €1.68, the stock had shed more than 14% on the day alone, making it the most-sold name on AJ Bell’s trading platform. The rout leaves ITM Power roughly 35% below its late-May year-high, with the annualised 30-day volatility reading north of 100%.

Great British Energy takes a 10.4% stake

The most consequential development came from the UK government’s new clean-power arm. Great British Energy invested £40 million in ITM Power, securing a 10.4% stake that strengthens the company’s balance sheet and political backing. The cash injection prompted management to lift its year-end liquidity guidance to as much as £215 million. That war chest — already bolstered by a cash position of nearly £198 million before the deal — provides a multi-year runway as the company burns through roughly £30 million a year in operating losses.

Alongside the government investment, ITM Power signed a partnership with Protium Green Solutions to develop industrial hydrogen projects in Britain. The first scheme, Cromarty in Scotland, entails a 15 MW electrolyser capable of producing seven tonnes of green hydrogen per day. A final investment decision is expected by December 2026.

The Chronos countdown

Investor attention, however, is fixed squarely on June. Two milestones dominate the calendar. First, the UK’s competition authority must approve a £46.5 million state grant for ITM’s new automated manufacturing line in Sheffield. That facility will produce the next-generation Chronos modules — 2.5 MW units that cut capital costs by 40% and halve the physical footprint. The company aims for 1 GW of annual capacity by 2028, with total investment pegged at £120 million. The grant review is due this month, with management’s final investment decision to follow immediately after.

Second, the market awaits an update on the UK’s HAR2 hydrogen allocation round. ITM Power is already listed as a preferred supplier for two projects, but final contracts depend on developers’ go-ahead decisions. Any delay or scaling-back of HAR2 would cloud the near-term order pipeline.

Diverging analyst opinions

The analyst community is split on ITM’s trajectory. Morgan Stanley stands out as the most bullish, upgrading the stock to “Overweight” in late April and projecting EBITDA break-even by fiscal 2028 — a full year ahead of the consensus view. Morgan Stanley’s call requires roughly 200 MW of new orders, a steep but not impossible bar. On the other side, the consensus price target of 84.60 pence implies a 45% discount to the current share price. No other major bank has followed Morgan Stanley’s lead, and the stock’s extreme volatility keeps many on the sidelines.

Financials that tell two stories

The company’s first half of fiscal 2026 delivered a record £18 million in revenue, prompting management to lift the full-year forecast to £40-43 million. The order book stands at £152 million, of which 71% is considered profitable. Yet the income statement still bleeds red: the expected annual operating loss of around £30 million underscores the gap between commercial progress and profitability. Cash of £215 million (post the Great British Energy deal) provides cover, but investors want to see that burn rate narrow as the Chronos line ramps.

What to watch next

With the Chronos investment decision pencilled for June and the HAR2 update imminent, the next few weeks will test whether the market is willing to look past near-term losses. ITM Power reports its full-year results on 15 September — the day when management must demonstrate that strategic wins are translating into a tangible reduction in cash consumption. Until then, the stock’s wild swings are likely to continue as traders weigh state backing, a revamped product line, and the uncomfortable reality that the entire hydrogen sector is being judged less on promise and more on execution.