Buy Yash Highvoltage Ltd for Target Rs. 1200 by Choice Institutional Equities
Power Capex Supercycle Driving Structural Demand for Transformer Bushings YASHHV is structurally positioned to benefit from India’s largest-ever power infrastructure buildout. The National Electricity Plan (NEP-II) targets addition of 1,274 GVA of transformation capacity and 191,474 circuit kilometres of transmission lines by FY32, supported by aggregate T&D investments of over INR 9 Tn. A significant portion of this capex is directed towards expansion of the 220 kV and above transmission network. Every power transformer deployed across this network requires minimum 7 bushings, creating a direct demand linkage for transformer bushings. YASHHV is a pure-play transformer bushing manufacturer with capabilities across both RIP and OIP bushings, and holds vendor approvals from NTPC, PGCIL and BHEL.
Backward Integration and Greenfield Expansion to Boost Margin
YASHHV’s INR-1,530 Mn greenfield facility marks a major strategic investment, enabling backward integration into high-margin RIP core manufacturing along with addition of ~6,000 units of annual capacity. The project is anticipated to improve margin through import substitution, strengthen export competitiveness and expand the global addressable market opportunity. The expansion will increase YASHHV’s manufacturing capacity to ~15,000 units annually, supporting the management’s longterm guidance of ~40% revenue CAGR over the next four to five years.
Niche Leadership and Technological Expertise Drive Competitive Moat YASHHV operates in one of the most specialised and qualification-intensive segments in the global power equipment industry - condenser-graded transformer bushings. The company is among fewer than 12 independent manufacturers globally (exChina) and remains the only pure-play Indian player in this segment, indicating high technological and entry barriers. Utilities typically require 8-10 years to qualify new suppliers, creating a strong competitive moat. YASHHV holds an estimated 18% share of the domestic addressable bushing market (OIP + RIP, 66 kV-245 kV), supported by its strong positioning as one of the few independent specialist suppliers in the segment.
Valuation and View: YASHHV offers an attractive long-term growth opportunity, driven by rising transmission investments, capacity expansion, backward integration and increasing exports of higher-margin RIP bushings. As India's only listed pure-play transformer bushing manufacturer, the company is well-positioned to benefit from rising transformer demand across domestic and international markets. Its niche positioning, customer qualification requirements and strong relationships with leading transformer OEMs create meaningful entry barriers. Revenue/EBITDA/PAT CAGR of 47%/53%/48%, respectively, over FY26-29E is projected to be driven by sustained growth, an improving product mix and operating leverage. We initiate coverage with a ‘BUY’ rating and a one-year DCF-based target price of INR 1200, implying 71% upside from the current level. The target price implies a P/E of ~51x FY28E EPS and ~29x FY29E EPS, with a PEG ratio of 1.1x.
Unpriced Optionality: A potential migration to the NSE mainboard within the next 1.5-2 years could improve liquidity, enhance investor visibility and support a valuation re-rating.
Key Risks: Customer concentration, possible qualification delays, probable power capex slowdown, greenfield project execution delays, import dependence, slowerthan-expected RIP adoption and competitive pricing risks.
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SEBI Registration no.: INZ 000160131
