India's Power Transmission and Distribution (T&D) supply chain by Utsav Verma, CFA Head of Research, Choice Institutional Equities
Below the India's Power Transmission and Distribution (T&D) supply chain by Utsav Verma, CFA Head of Research, Choice Institutional Equities
This week's meetings were across India's Power Transmission and Distribution (T&D) supply chain: transformer makers, conductor and cable players, winding-wire suppliers and EPC players. The message on demand was unanimous. Order books are the fullest in over a decade, and companies are bidding today for FY29–30 execution. Everyone we met is making the same move: up the voltage ladder.
1. India T&D | This Cycle Is Not Like the Last
Where past cycles went wrong: Previous booms disappointed equipment makers. In FY08–12, transformer capacity nearly doubled to ~4 lakh MVA ahead of power plants that slipped, while utilities with ~25% AT&C losses paid late. The FY13–17 765kV build was the largest yet, but imports took the high-voltage end, and utility debt forced the UDAY bailout.
Why this cycle is different: Past booms failed in one of two ways. Either capacity was built for demand that never arrived, or the high-voltage work went to importers while domestic players fought over crowded low-kV orders. This time, demand comes from various independent sources rather than one. The grid itself is the bottleneck, so generation is waiting for transmission rather than the reverse. Buyers are healthier, with AT&C losses down to 15% in FY25. Indian manufacturers are now qualifying at 400kV and 765kV themselves.
The drivers:
* India's data centre capacity is forecast to grow from 2.2 GW to 12 GW by 2030 (Wood Mackenzie), and some states are already upgrading lines from 400kV to 765kV to serve them.
* Non-fossil capacity crossed 300 GW in July'26 against a 500 GW target for 2030, with ~158 GW more under construction.
* Over 70% of US transmission lines and transformers are more than 25 years old, US lead times for large transformers have stretched to as long as four years, and Europe needs €584 Bn of grid investment this decade.
* At home, the pre-2002 grid is now 25–40 years old and transformer failures are mounting.
What managements told us
- Visibility is long: Lead times of 18–24 months mean today's bids are for FY29–30 execution. 400/765kV orders carry ~3 years of visibility, vs 1.5–2 years at 220kV. Guided growth ranges from ~27% to 40–45% a year for the next two years.
- Everyone is moving up the voltage ladder: Transformer makers are adding dedicated 400kV and 765kV capacity. Conductor makers are shifting to HTLS (~ 18–20% margins vs 9–10% for conventional conductors). EPC players are moving from distribution work to EHV substations (15%+ margins vs ~13%). Winding-wire makers are skewing new capacity toward CTC (Continuously Transposed Conductors) for 765kV and HVDC.
* Lower price, higher margin: Price per MVA falls from ?12–14 lakh at 66kV to ?5.5–6 lakh at 400kV, but margins rise 2–4% because fewer players can bid. At one maker, premium utility orders have gone from ~10% of the mix in FY24 to ~70% today.
- Qualification is the moat: Only ~50% of transformers pass short-circuit testing on the first attempt, and 765kV qualification needs 3–4 years of field performance. Managements see this, rather than capacity, as the real barrier to entry.
- Exports are a new growth leg: A winding-wire maker now earns 28–30% of revenue from exports, which grew 76% YoY.
- Integrating backwards to protect margins: Companies are bringing tanks, radiators and insulation in-house and recycling copper scrap.
- The bottleneck is components, not demand: Bushings are already tight, and press boards are flagged as next. One supplier expects CTC demand to nearly triple, from ~40k MT in FY25 to ~110k–120k MT by FY30–31.
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