India grid bottlenecks buoy GE Vernova and Atlanta Electricals

Extra-high-voltage (EHV) transformers have become the primary bottleneck stalling India's power transmission expansion. Substation commissioning is lagging because 400-765kV transformer supply cannot keep pace with demand. This specific segment faces high entry barriers, stringent qualification norms and requirements for long execution track records.

This supply deficit is expected to persist for at least two years in the EHV segment, sustaining high factory utilisation and pricing power for established manufacturers. While lower-voltage capacity additions should ease those specific constraints within 12 to 18 months, the EHV crunch will continue to support margins across the broader transmission value chain, including switchgear and automation suppliers.

Approved Chinese manufacturers are unlikely to disrupt this pricing equilibrium in the near term. They currently operate on a relatively small manufacturing base in India and would require significant capital investment and time to scale up. Furthermore, the overarching demand-supply gap is projected to outpace any incremental capacity that comes online.

A secondary catalyst is emerging on the cost side, as utilities had previously shelved tenders due to soaring prices for copper, steel and transformer oil. As these commodities begin to soften, utilities are expected to revise project budgets and reissue deferred tenders. Analysts anticipate a meaningful recovery in order inflows starting in the second and third quarters of fiscal 2027.

GE Vernova T&D India is positioned to capture this structural demand through renewable integration and rising HVDC requirements, further supported by US exports and data centre demand. The company secured INR148b in order inflows during FY26. Analysts project a revenue, EBITDA and profit after tax compound annual growth rate of 29%, 31% and 31% respectively through FY28, with a price target of Rs 5200.

Smaller peer Atlanta Electricals is scaling rapidly to capitalise on the same dynamics. The company posted a 129% year-on-year surge in fourth-quarter FY26 net profit to INR1b, while revenue jumped 82% to INR7.5b. Its order book stood at INR25b at the end of FY26, backed by annual inflows of roughly INR26-27b.

Atlanta is expanding into the constrained 400kV and 765kV markets from its Vadodara facility while pursuing BESS-linked opportunities. Management has guided for a 40% revenue CAGR over FY25-28, driven by this capacity ramp-up and backward integration. Analysts expect the company to deliver a revenue, EBITDA and PAT CAGR of 36%, 41% and 46% over FY26-28, assigning a target price of Rs 1950.