The transmission sector in India is poised for growth, driven by strong demand and supply constraints, particularly in the extra-high-voltage (EHV) transformer segment. This trend is expected to benefit companies like GE Vernova and Atlanta Electricals, which are well-positioned to capitalize on the sector's expansion over the next one to two years.
The EHV transformer segment has emerged as a critical bottleneck in project execution, delaying substation commissioning despite the availability of other equipment. Improved domestic manufacturing capacity is anticipated to alleviate these delays, benefiting suppliers of switchgear, automation systems, and other grid equipment alongside transformer manufacturers. Demand-supply dynamics remain favorable, especially in the 400-765kV transformer segment, where capacity additions have been limited due to high entry barriers and stringent qualification norms. While capacity expansion in the lower-voltage segment is expected to improve supply over the next 12-18 months, the EHV market is likely to remain capacity constrained over the next two years, supporting healthy utilization levels and pricing.
Chinese manufacturers, despite being approved, are unlikely to disrupt the market in the near term as they currently operate on a relatively small manufacturing base in India. They would require significant capital investment and time to expand capacity. The demand-supply gap is expected to persist even after incremental capacities come online, limiting the risk of aggressive pricing. This policy is seen as a measured step to strengthen domestic supply rather than introduce significant competitive pressure.
A revival in transmission ordering is expected as commodity prices, such as copper, steel, and transformer oil, begin to soften. This will likely lead utilities to revise project budgets and reissue deferred tenders, supporting an improvement in order inflows from the second and third quarters of FY27.
GE Vernova T&D India is well-positioned to benefit from India's transmission sector growth, supported by renewable integration, grid modernization, and rising HVDC demand. Strong order inflows of INR148 billion in FY26, improving export prospects, and a robust order pipeline provide visibility on sustained growth. Atlanta Electricals Ltd. is entering a strong growth phase, supported by expansion into higher-voltage transformer categories, capacity ramp-up, and increasing opportunities in renewable energy and export markets. The company delivered a strong 4QFY26 performance, with revenue/EBITDA/PAT rising significantly year-on-year.
Background
India's transmission sector has been facing challenges due to supply constraints, particularly in the EHV transformer segment, which has delayed project execution. The government's focus on strengthening domestic manufacturing capacity aims to address these issues, providing opportunities for local companies to expand and meet the growing demand.
The medium-term outlook for the transmission sector remains constructive, with strong infrastructure demand, sustained supply tightness in critical equipment, and improving execution visibility underpinning growth prospects. While any future policy shift allowing wider participation or direct imports could alter the competitive landscape, the current framework suggests domestic manufacturers are well-positioned to benefit from the sector's ongoing expansion.
