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India’s power sector is stepping into a decisive growth phase, with transmission equipment emerging as the backbone of the country’s expanding energy ecosystem. A new report by Motilal Oswal Financial Services highlights that investments of nearly Rs.9 lakh crore planned under the National Electricity Plan (FY23–32) are set to transform how electricity is transmitted, distributed and consumed across the country.

This large-scale investment cycle, which began around FY22–23, is already translating into strong growth for companies in the transmission and distribution space. Order books have expanded, revenues have improved, and profitability has strengthened across the sector. The report notes that this momentum is expected to continue over the next few years, supported by rising demand from both domestic projects and global markets.

At the heart of this transformation is India’s ambitious push to integrate renewable energy into the grid. Even partial achievement of the national transmission targets is expected to create significant opportunities for equipment manufacturers. While ordering activity saw some slowdown in FY26 due to temporary constraints such as high-capacity utilisation and longer manufacturing timelines for advanced equipment, the underlying demand remains strong and is expected to recover as capacities expand.

A key trend shaping the sector is the growing shift towards high-voltage and more complex transmission systems. This includes rising investments in HVDC (high-voltage direct current) projects, which are critical for long-distance power transmission and renewable integration. With a strong pipeline of such projects, the sector is likely to see steady order inflows in the coming years.

Beyond domestic demand, Indian manufacturers are also well-positioned to benefit from a global supply gap in transformers. Markets such as the US and Europe are witnessing a sharp rise in demand driven by renewable energy, data centres, and electrification trends. With supply unable to keep pace globally, Indian companies are increasingly emerging as key suppliers, opening up a strong export opportunity.

Despite this demand surge, supply constraints continue to persist in the near term. Transformer manufacturing capacity has not fully kept pace with rising requirements, leading to longer delivery timelines. To address this, major players are undertaking significant capacity expansions, which are expected to come onstream over the next two to three years. This is likely to help bridge the gap while supporting sustained growth.

Another important shift is the rising focus on grid stability. With renewable energy being intermittent in nature, there is a growing need for battery energy storage systems (BESS). India is targeting a sharp increase in storage capacity over the next decade, which will further drive demand for transmission equipment and related infrastructure.

Overall, the report maintains a positive outlook on the sector, stating that the combination of strong domestic investments, expanding global opportunities, and evolving energy needs will continue to support growth. While valuations have risen, the possibility of further earnings growth and export-led expansion is expected to sustain investor interest in the space.

As India accelerates towards its energy transition goals, the transmission equipment sector is set to play a critical role—quietly powering the country’s journey towards a more reliable, efficient and future-ready electricity network.

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