Power T&D Sector Outlook FY27: 3 Stocks to Watch as India’s Power Transmission Growth Story Expands
The Central Electricity Authority’s roadmap points to investment opportunities exceeding Rs.9.15 lakh crore in transmission up to 2032, including more than 1.91 lakh circuit-km of new lines and roughly 1,270 GVA of transformation capacity during FY23-FY32. Jefferies estimates transmission capex could rise from Rs.2.7 lakh crore over FY22-FY26 to Rs.5.9 lakh crore during FY26-FY30, while Citi estimates HVDC equipment alone could represent a Rs.1.6 lakh crore opportunity.
The investment question this article raises is no longer simply whether transmission demand will grow. It is whether companies can convert this unusually large pipeline into orders, revenue, margins and cash flows fast enough to justify already elevated expectations.
Strong Capex, But a More Difficult H2
India entered FY27 on stronger economic footing than expected. Q1 GDP expanded 7.8%, while GVA grew 8.2%. QuantEco consequently raised its FY27 GDP forecast by 50 bps to 6.9%, citing stronger investment, industrial activity and resilient consumption. Government capex also accelerated sharply in June-July. Q1 capital-goods production grew 15.2% YoY, while machinery-equipment imports rose 51.5%.
These trends are supportive for capital goods, although the second half could become more difficult. QuantEco expects growth to moderate as the deficient monsoon, El Niño, adverse base effects and fiscal constraints weigh on consumption and potentially public capex. Rural demand is particularly exposed, while urban consumption faces higher inflation and tighter financing conditions.
Inflation adds another constraint. QuantEco retains a 5.1% FY27 CPI forecast with risks skewed upward and expects 50 bps of RBI tightening in H2 FY27. It also forecasts the 10-year G-sec yield at 7.25% and USD/INR around 97 by March 2027.
Power T&D is somewhat insulated from this near-term macro slowdown because transmission investments are largely driven by generation additions, renewable evacuation and grid reliability requirements. Those projects can retain a multi-year investment case even if GDP or consumption growth moderates.
Why India's Grid Needs Such a Large Investment Cycle
The scale of the generation buildout explains much of the transmission opportunity. The Ministry of Power expects peak electricity demand to reach approximately 388 GW by FY32. Transmission planning is designed to accommodate roughly 590 GW of generation capacity additions over FY23-FY32, including 330 GW of solar, 124 GW of wind, 52 GW of hydro/PSP and 73 GW of thermal capacity. Inter-regional transfer capacity is planned to increase from around 120 GW in December 2025 to 168 GW by 2032.
India had roughly 272 GW of non-fossil capacity as of January 2026, leaving another 228 GW of renewable capacity to be added to achieve the 2030 objective. Transmission infrastructure for evacuation of approximately 207 GW of renewable capacity was already under construction or bidding.
The CEA has since published a dedicated transmission plan for integrating more than 900 GW of non-fossil capacity by FY36. This creates a physical bottleneck because generation capacity can generally be added faster than high-voltage transmission infrastructure.
Renewable projects are also often located far from the largest consumption centres. Solar generation from Rajasthan, Gujarat or Ladakh and wind generation from coastal regions may need to travel hundreds or thousands of kilometres. That creates demand for transmission lines as well as HVDC systems, converter transformers, substations, GIS, reactors, switchgear, grid automation and FACTS equipment.
HVDC Could Become the Highest-Value Part of the Opportunity
HVDC becomes increasingly important when large volumes of electricity have to travel long distances with lower losses.The Government’s transmission plan includes new HVDC corridors specifically designed to move bulk renewable electricity from generation-rich regions to major load centres.
Citi estimates that the CEA’s 900-GW integration roadmap translates into around Rs.7.9 lakh crore of transmission investment, with HVDC equipment accounting for approximately Rs.1.6 lakh crore. Citi also argues that localisation requirements and certification create barriers to entry, which could concentrate the opportunity among established manufacturers.
Jefferies reaches a similar conclusion through its capex forecasts. It expects transmission capex of Rs.5.9 lakh crore over FY26-FY30, compared with Rs.2.7 lakh crore during FY22-FY26, implying more than a doubling of spending. It also expects data centres to create additional demand for transformers, switchgear and other electrical equipment.
Macquarie has separately described Indian grid-equipment manufacturers as entering one of their strongest growth cycles in decades, driven by renewable integration, rising electricity demand, grid modernisation and export opportunities.
ICRA provides further support from the broader capital-goods industry. Order inflows for its 16-company sample grew 32% YoY in 9M FY26, taking the aggregate order book to Rs.2.20 lakh crore. It expects FY27 operating income to grow roughly 14% and median operating profit by more than 15%.
Sector numbers that define the thesis
Indicator
Current/forecast opportunity
Official transmission investment opportunity to FY32
>Rs.9.15 lakh cr
Jefferies FY26-FY30 transmission capex estimate
Rs.5.9 lakh cr
Jefferies FY22-FY26 comparison
Rs.2.7 lakh cr
Citi transmission opportunity linked to 900-GW plan
~Rs.7.9 lakh cr
Citi estimated HVDC OEM opportunity
~Rs.1.6 lakh cr
Inter-regional transfer capacity by FY32
168 GW
Planned new transmission lines, FY23-FY32
>1.91 lakh ckm
Planned transformation additions
~1,270 GVA
Where Is the Sector Growth Actually Showing Up?
Hitachi Energy India
Hitachi Energy provides direct exposure to the technologically intensive part of the cycle, including HVDC, transformers, grid integration, automation and high-voltage equipment.
Q1 FY27 orders reached Rs.5,096 crore, revenue reached Rs.2,494 crore, and the order backlog increased to Rs.32,222 crore. Excluding the large comparable HVDC order, Q1 order inflows grew roughly 26% YoY. Revenue grew almost 69% YoY, while operating EBITDA margin expanded to around 16%.
Orders are also broadening beyond conventional utilities. Management highlighted data-centre orders from multiple customers, the company’s first BESS project and a major European offshore-wind evacuation project. Management also said that if India’s industry-wide ambition of around 15 GW of data-centre capacity by 2030 materialises, the pipeline should remain sustainable. This broader mix reduces the company’s dependence on PGCIL tenders.
The valuation already reflects considerable optimism. Hitachi Energy had risen about 74% in 2026 by September 17, while its TTM P/E was around 135x according to market data. Jefferies nevertheless expects approximately 54% EPS CAGR over FY26-FY29E and recently maintained a Buy call based on the company’s backlog and HVDC opportunity. .
GE Vernova T&D India
GE Vernova T&D gives direct exposure to transformers, switchgear, substations, grid automation, FACTS and HVDC. Q1 FY27 revenue increased 38% YoY to around Rs.1,840 crore, but order intake fell approximately 30% to Rs.1,140 crore because the TBCB ordering pipeline had been weak earlier in the year. Its backlog remained very large at roughly Rs.20,930 crore, equivalent to more than three years of FY26 revenue.
Management said the lower Q1 orders reflected timing rather than weaker structural demand. The June-July TBCB pipeline improved, and management continues to target roughly Rs.7,000-8,000 crore of base orders in FY27. It also expects a US data-centre-related order to convert during Q2-Q3, while significant HVDC revenue should begin contributing later in the cycle.
The risk is margins. Gross margin fell sharply as input costs increased, the export mix weakened and lower-margin high-voltage projects ramped up, even though the EBITDA margin remained around 25%. This makes GE Vernova a useful test of the sector thesis: a huge backlog is valuable only if fresh orders continue replacing execution and margins remain disciplined.
KEC International
KEC represents a different point in the value chain. Instead of primarily manufacturing high-value equipment, it constructs transmission lines and substations and supplies towers, cables and conductors globally.
Its Q1 FY27 numbers show why a bullish sector does not automatically produce bullish quarterly earnings. Revenue was almost flat at Rs.5,024 crore, EBITDA fell to Rs.291 crore from Rs.350 crore, and PAT declined to Rs.73 crore from Rs.125 crore. Management blamed Middle East disruptions, labour shortages and slower execution of water projects.
Yet the demand side remains strong. Order book plus L1 exceeded Rs.40,000 crore, while management said its tender pipeline exceeded Rs.2 lakh crore. It expects labour availability and supply chains to normalise and execution to strengthen in subsequent quarters.
September provided further evidence: KEC won another Rs.1,303 crore of T&D and cable/conductor orders across India, the Middle East and the Americas, taking FY27 YTD order intake above Rs.7,600 crore. But the stock remained around 46% lower over 2026 despite those orders.
That divergence is analytically useful: KEC demonstrates that the industry's order opportunity can remain strong even while execution, margins and working capital prevent the stock from immediately participating.
What Could Break the Thesis?
Execution is the main risk. Transmission projects can be delayed by land acquisition, right-of-way problems, customer approvals and slower TBCB awards. HVDC projects are particularly large and concentrated, so delays can materially shift revenue between years.
Capacity is another risk. Equipment manufacturers are expanding factories aggressively. If domestic capacity grows faster than actual ordering, today’s shortages could eventually become oversupply and pricing pressure. GE Vernova’s management has acknowledged this possibility in a purely domestic market, while arguing that export shortages provide an additional outlet.
Commodity inflation, especially in copper, aluminium and steel, is another concern. ICRA specifically identifies high industrial-metal prices and the ability to pass them through as important variables for margins.
Valuation adds a further risk if expectations move too far ahead of execution. Recent volatility in GE Vernova, Hitachi Energy, CG Power and other power-capex names shows how quickly sentiment can shift when highly rated stocks become associated with themes such as AI and data-centre capex.
Future Outlook
India’s Power T&D investment case is supported by generation expansion, renewable evacuation, HVDC adoption, grid modernisation, data-centre demand and export opportunities. Official planning suggests transmission investment could remain elevated well beyond FY27.
The companies, however, are exposed to different parts of that cycle. Hitachi Energy is more dependent on earnings growth and high-end grid technology. GE Vernova’s case depends more heavily on order conversion and HVDC. KEC’s near-term performance is tied more closely to execution and margin recovery. The sector opportunity may be common to all three, but their ability to convert it into durable earnings will depend on different operating variables.