India's Power Grid Set for ₹9 Trillion Capex Surge by 2032: Report

The report said "the transmission and distribution (T&D) value chain... continues to benefit from a robust capex outlay of INR9t until 2032," adding that the T&D capex cycle, which began in FY22-23, has already driven "sharp growth in order books, revenue, and the margin profiles for industry participants."

Highlighting the near-term slowdown, the report noted that "sector-level ordering was weaker in FY26 (16 schemes awarded) versus FY25 (45 schemes awarded), primarily due to temporary bandwidth constraints rather than any structural demand slowdown."

It added that domestic manufacturers are currently operating at high capacity utilisation and are increasingly focusing on higher-voltage transformers, which "involve longer manufacturing cycles and testing timelines," thereby extending lead times.

Despite this, the brokerage maintained a positive outlook, stating that "there remains room for the cycle to continue over the next couple of years," supported by capacity expansions and strong demand from both domestic and global markets.

The report further said India's National Electricity Plan outlines an "ambitious investment plan of ~INR9t in transmission," driven by large-scale renewable energy integration, which has already led to a "structural acceleration in orders over the past few years."

On demand trends, it noted that "demand continues to remain strong from both domestic and export markets while transformer supply has struggled to keep pace," resulting in longer lead times and a favourable environment for manufacturers.

Global opportunities are also opening up, with the report highlighting that transformer demand in the US and Europe is witnessing a "historic surge" due to "renewable energy integration, data center expansion, industrial electrification, electric vehicle (EV) charging infrastructure, and the urgent need to replace aging infrastructure," creating a "demand-supply mismatch" and increasing reliance on imports and higher transformer prices.

This, it said, presents an opportunity for Indian companies, as "domestic manufacturers... are benefiting from India's growing role as a manufacturing base within global OEM feeder factory networks."

The report also pointed towards emerging opportunities in high-voltage direct current (HVDC) projects, stating that out of a 32.3 gigawatt (GW) pipeline, "about 14.5 GW has already been tendered and awarded," with expectations of "one to two HVDC awards annually going forward."

The report said it expects "transformer players to continue delivering strong earnings growth over FY25-28," although it cautioned that valuations are no longer cheap.

However, it added that "possibility of further earning upgrades and unfolding of export opportunities can sustain these valuations," indicating continued investor interest in the space.

- ANI