GE Vernova, Atlanta Electricals among top beneficiaries of India's transmission expansion

The government's decision to allow four Chinese entities with manufacturing facilities in India to participate in critical power transmission projects is expected to improve equipment availability without materially altering the sector's favourable outlook. With strict localisation requirements mandating 50-60% domestic content and restrictions on direct imports, the move is aimed at addressing supply bottlenecks rather than intensifying price competition.

The transmission sector continues to benefit from robust demand and persistent supply constraints, particularly in the extra-high-voltage (EHV) transformer segment. Transformers have emerged as the key bottleneck in project execution, delaying the commissioning of substations despite the availability of other equipment. Improved domestic manufacturing capacity is therefore expected to ease execution delays across the broader transmission value chain, benefiting suppliers of switchgear, automation systems and other grid equipment alongside transformer manufacturers.

Demand-supply dynamics remain supportive, especially in the 400-765kV transformer segment, where capacity additions have been limited due to high entry barriers, stringent qualification norms and long execution track records. While capacity expansion in the lower-voltage segment is likely to improve supply over the next 12-18 months, the EHV market is expected to remain capacity constrained over the next two years, supporting healthy utilisation levels and pricing.


Importantly, the approved Chinese manufacturers are unlikely to disrupt the market in the near term. Most currently operate on a relatively small manufacturing base in India and would require meaningful capital investment and time to expand capacity. Moreover, the demand-supply gap is expected to persist even after incremental capacities come online, limiting the risk of aggressive pricing. The policy is therefore viewed as a measured step to strengthen domestic supply rather than introduce significant competitive pressure.

Another positive catalyst is the expected revival in transmission ordering. Tender activity had slowed in recent months as elevated prices of copper, steel and transformer oil made bidding commercially unviable. As commodity prices begin to soften, utilities are expected to revise project budgets and reissue deferred tenders, supporting an improvement in order inflows from the second and third quarters of FY27.

Overall, the medium-term outlook for the transmission sector remains constructive. Strong infrastructure demand, sustained supply tightness in critical equipment and improving execution visibility continue to underpin growth prospects. While any future policy shift allowing wider participation or direct imports could alter the competitive landscape, the current framework suggests domestic manufacturers are well positioned to benefit from the sector's ongoing expansion over the next one to two years.

GE Vernova: Target: Rs 5200

GE Vernova T&D India remains well-positioned to benefit from the structural growth opportunity in India’s transmission sector, supported by renewable integration, grid modernization and rising HVDC demand. Strong order inflows of INR148b in FY26, improving export prospects and a robust order pipeline provide visibility on sustained growth.

While domestic base ordering may remain muted in the near term, export opportunities, particularly from the US and data center-related demand, should provide support.

Healthy revenue mix, pricing mechanisms and operating leverage are expected to sustain margins. We expect revenue/EBITDA/PAT CAGR of 29%/31%/31% over FY26-28.

Atlanta Electricals: Buy| Target Rs 1950

Atlanta Electricals Ltd. is entering a strong growth phase, supported by expansion into higher-voltage transformer categories, capacity ramp-up, and increasing opportunities in renewable energy and export markets.

The company’s focus on backward integration, EHV transformers, and BESS-linked opportunities is expected to strengthen margins and enhance long-term execution visibility.

ATLANTAE delivered a strong 4QFY26 performance, with revenue/EBITDA/PAT rising 82%/118%/129% YoY to INR7.5b/INR1.5b/INR1b, ahead of estimates across parameters. The company ended FY26 with an order book of INR25b and FY26 inflows of ~INR26-27b.

Management continues to guide ~40% revenue CAGR over FY25-28, aided by higher execution from the Vadod facility, expansion into 400kV and 765kV transformers, and scaling exports. We raise our FY27/FY28 estimates by 9%/8% and expect revenue/EBITDA/PAT CAGR of ~36%/41%/46% over FY26-28E.

(The author is Siddhartha Khemka, Head of Research, Wealth Management, MOFSL)

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)