Global financial services firm Macquarie has initiated 'Outperform' ratings on CG Power, Siemens Energy India, GE Vernova T&D, and Hitachi Energy India. The brokerage expects these manufacturers to benefit from a massive ₹7.9 lakh crore investment cycle in India's power grid between FY27 and FY36, driven by rising electricity demand and renewable energy integration.
Macquarie has initiated coverage on four prominent Indian transmission and distribution (T&D) equipment manufacturers, citing a long-term growth cycle for the power infrastructure sector. The brokerage projects that India will see approximately ₹7.9 lakh crore in T&D investments through FY36, fueled by the push for renewable energy, industrial expansion, and the need for grid modernization.
Infrastructure Spending Drivers
India’s power sector is currently undergoing a significant shift as the country works to integrate increasing amounts of renewable energy into the national grid. Demand is expected to stay high due to urbanization, increased cooling requirements, and the growth of power-intensive industries, including data centers and green hydrogen projects. Beyond domestic needs, Macquarie noted that a global shortage of high-voltage equipment provides Indian manufacturers with an opportunity to increase exports, potentially improving their pricing power and global market presence.
Key Companies in Focus
CG Power and Industrial Solutions is highlighted for its execution track record and diversified product range. The company is actively expanding its manufacturing capacity for transformers and switchgear to cater to rising demand. Its involvement in railway equipment and the semiconductor assembly and testing (OSAT) sector provides additional avenues for growth.
Siemens Energy India Ltd. is viewed as a significant beneficiary of the country's move toward higher-value grid technologies. Its focus on HVDC (high-voltage direct current) systems and grid automation is expected to be a key driver for profitability. Furthermore, the company acts as a vital manufacturing hub for its global parent, providing it with exposure to international projects.
GE Vernova T&D India is noted for its leadership in advanced grid technologies like FACTS (flexible AC transmission systems) and HVDC. Its local manufacturing of these components is expected to support its competitive position as the energy transition progresses.
Hitachi Energy India stands out for its large order backlog, which provides strong visibility for future revenue and earnings. Its role in major HVDC projects is crucial for the large-scale integration of renewable energy, and it remains well-positioned to benefit from widespread grid modernization efforts.
Risks and Monitorables
While the outlook for the T&D sector is supported by structural demand, investors should remain aware of potential risks. These include the risk of delays in project execution, cost overruns due to raw material price volatility, and the competitive landscape for high-value contracts. Success for these companies will depend on their ability to manage supply chains effectively and maintain margins amid large-scale capacity expansions. Market participants will likely track upcoming quarterly results, order book updates, and actual capital spending figures to measure the pace of this growth cycle.