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Power T&D capex remains structurally strong; execution, capacity ramp-up and margins remain key monitorables for Q2FY27

* Transmission and transformer demand remains robust: The global transformer market is expected to grow from USD 65 Bn in 2025 to USD 99 Bn by 2031, a 7.2% CAGR. India’s transformer market is projected to rise from USD 3 Bn to USD 4.8 Bn, an 8.2% CAGR. India plans to invest INR 9 Tn in transmission infrastructure by FY32, while installed power capacity is expected to rise, from 533 GW in FY26 to 874 GW by FY32. Grid expansion, renewable integration and rising peak power demand continue to drive T&D investments. Order books for transformers and bushings remain strong, providing a multiyear revenue visibility for equipment makers.

* Wires & cables demand remains healthy, with value growth supported by copper price: The global wires & cables market, according to Fortune Business Insights, is projected to grow from USD 233 Bn in 2025 to USD 411 Bn by 2034, indicating a 6.6% CAGR. Infrastructure, real estate and export demand remain supportive. Elevated copper price is driving reported revenue growth, while pass-through remains largely intact. Pricing lag and channel stocking may create quarterly margin volatility, although the impact is expected to normalise over the year. Q2FY27 is seasonally softer due to the monsoon-related slowdown.

* YASHHV: Strong H1FY27 growth is expected, supported by a robust order book and healthy execution. The greenfield RIP plant has commenced commercial production, while in-house RIP core trials and customer approvals is expected to support backward integration and margins over time.

* RRKABEL: Wires & Cables (W&C) volume growth is projected to moderate in Q2FY27 due to monsoon-related softness. Value growth remains strong, supported by higher realisation following elevated copper price and passthrough. FY27 volume and margin guidance remains intact, with Silvassa Unit 3 now operational. FMEG is projected to remain loss-making in the seasonally weak quarter.

* To watch out for: YASHHV order inflows and execution; ramp-up of the new RIP facility and in-house RIP cores; copper price trajectory and pass-through timing; RRKABEL W&C volumes and margins versus guidance; and FMEG profitability.

Our Coverage Universe

* YASHHV: We expect H1FY27 revenue to grow 75.6% YoY to INR 1,749 Mn, supported by strong execution and robust demand for OIP and RIP bushings. EBITDA is estimated at INR 416 Mn, translating into a margin of 23.8%, up 250 bps YoY, while PAT is estimated at INR 232 Mn, growing 69.6% YoY despite higher depreciation. The new plant ramp-up, strong order-book execution, indigenous RIP core trials and customer approvals remain key monitorables.

* RRKABEL: We anticipate Q2FY27 revenue to grow 39.5% YoY to INR 30,176 Mn, driven by higher realisation from elevated copper price. W&C volume growth, impacted by the monsoon, is projected to remain subdued (single digit vs 17% in Q1FY27). EBITDA is estimated at INR 2,565 Mn, indicating a margin of 8.5%, with the FY27 W&C margin guidance of 9.5% remaining intact. PAT, supported by a strong operating performance, is anticipated at INR 1,482 Mn. FMEG losses, copper pass-through, channel stocking and the ramp-up of Silvassa Unit 3 remain key monitorables.

High-conviction investment ideas: We maintain a positive stance on YASHHV and RRKABEL, backed by a strong T&D demand, capacity expansion and improving product mix. YASHHV’s new RIP/RIS facility should support order-book conversion and higher-value growth, while RRKABEL’s expansion, premiumisation and rise in exports are likely to drive sustained volume and margin improvement.

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