Top transformer stocks in India ranked by order book

The growth in renewable energy, particularly in solar and wind power, is significantly boosting demand for 100-500 MVA transformers. Moreover, the Indian government initiatives aimed at grid upgrades and the integration of cutting-edge technology are propelling the power transformer industry forward.

International markets are also contributing to this surge, with Middle Eastern and African governments actively promoting renewable energy, thereby intensifying the need for transformers. Demand is expected to remain strong, supported by new inter-state transmission system (ISTS)-connected power projects and high-voltage direct current (HDVC) projects.

To highlight the potential beneficiaries, this piece will focus on the crucial metric of order book strength. A robust order book signifies confirmed future revenue and strong demand for a company’s products. Companies with consistently high order books are likely to be well-positioned for future growth.

#1 Voltamp Transformers

Voltamp Transformers is a significant manufacturer of oil-filled power and distribution transformers, holding a 15% domestic market share. The company’s comprehensive product portfolio results from technical collaborations with numerous industry pioneers.

For fiscal year 2024 (FY24), Voltamp reported a robust order book of ₹18.5 billion, a significant 37% increase compared to the previous year. The company entered FY25 with a strong opening order book of ₹8.4 billion, indicating strong demand for its products and potential growth in the coming year.

Between 2020-2024, Voltamp’s net sales and profits registered a five-year CAGR of 13.3% and 29.3%, respectively. The company’s returns have been strong, with a five-year average Return on Capital Employed (RoCE) and Return on Equity (RoE) of 15.8% and 12.3%, respectively. With a strong order book, a robust balance sheet, and a positive profitability outlook, Voltamp is expected to grow well.

#2 Transformers and Rectifiers

Transformers and Rectifiers Ltd (TRIL) holds a prominent position as a leading transformer manufacturer, capable of producing units up to 1,200 kV. The company’s diverse product portfolio includes power and distribution transformers, furnace transformers, rectifier transformers, and speciality transformers.

TRIL reported a record-breaking order inflow during FY24, totalling ₹20.5 billion, including 11% export orders. The company’s unexecuted order book as of 31 March 2024, was valued at ₹25.8 billion, a significant 72% growth compared to FY23. TRIL is also actively negotiating inquiries exceeding ₹170 billion, indicating continued potential for growth.

The company’s success stems from strong in-house design and technical expertise, further bolstered by technical collaborations and joint ventures. While primarily focused on the domestic market, TRIL is expanding internationally, currently serving over 25 countries. Between 2020 and 2024, TRIL’s sales and net profits registered a five-year CAGR of 8.4% and 55.9%, respectively, with improved RoCE and RoE of 11.5% and 5.6%, respectively.

#3 Apar Industries

Apar Industries is the world’s largest conductor manufacturer, the third-largest transformer oil manufacturer, and India’s largest renewable cables manufacturer. The company reported a total order book of ₹83 billion in the conductors and cables business as of 31 March 2024, a 33% increase compared to the previous year.

During 2020-24, Apar Industries’ revenue and net profit grew at a CAGR of 15.1% and 43.5%, respectively. The company’s RoE stands at 19.9%. Apar’s competitive advantage lies in its strong position in thriving markets, cost efficiency, and strategically located manufacturing facilities. Supported by a robust order flow and growth opportunities, Apar Industries is well-positioned for sustained revenue growth.

The Indian government aims to award 50 GW of renewable energy capacity annually, including 10 GW from wind energy, between 2024 and 2028. The company believes that even partial execution of these ambitious plans will sustain strong demand for conductors, cables, and transformer oil.

#4 CG Power

CG Power, also known as Crompton Greaves Power, specializes in electrical equipment and engineering solutions. In FY24, the switchgear and transformer, along with the railways business, achieved the highest-ever sales, order inputs, and profits. The company reported a substantial increase in its unexecuted order book, valued at ₹62.7 billion as of 31 March 2024, a 45% year-on-year increase.

CG Power has undergone significant restructuring and implemented strategic initiatives to improve operational efficiency and profitability. These efforts have resulted in improved financial performance, reduced debt, and a positive outlook for the company.

Sales and net profit have improved drastically since FY22. Consequently, the returns have increased.

#5 GE T&D

GE T&D is a leading manufacturer of transformers for power transmission, distribution, and the renewable energy sector. The company has focused on providing transformers specifically designed for these applications, positioning itself as a frontrunner in the Indian market.

GE T&D’s order backlog surged to a record ₹62.7 billion as of 31 March 2024, a 69% year-on-year increase. The company’s order bookings throughout FY24 also reached record levels, with a 53% annual increase in Q4 to ₹13.3 billion, and a 112% on year growth to ₹27.4 billion for the entire fiscal year.

Between 2020 and 2024, sales and net profits have experienced volatility. However, the company appears to be turning around after minimizing its losses in FY23, reporting a substantial net profit of ₹1.8 billion in FY24.

In conclusion

The Indian transformer industry is electrifying its future. Driven by domestic and international demand for transmission and distribution products, Indian manufacturers are witnessing a rise in orders. This promising outlook is bolstered by global infrastructure spending, the “China plus one” strategy diversifying supply chains, and the growing embrace of renewable energy, all creating a strong need for transformers. Additionally, industry consolidation presents opportunities for Indian companies to establish themselves as leading players in the global transformer market.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.