Sales in India’s electric transformer market will grow 10–11% annually through next fiscal, CRISIL Ratings said on Tuesday. The market size will rise beyond ₹40,000 crore from an estimated ₹33,000 crore in FY25.
The growth will come from heavy investments in transmission and distribution (T&D) infrastructure. This will support a sharp rise in electricity demand as installed generation capacity climbs from 485 GW to 570–580 GW. Meanwhile, peak demand will jump over 20% to 296 GW.
The National Electricity Plan (NEP) targets transformer capacity to increase by 776,330 MVA to 1,847,280 MVA by FY27. So far, only 30% has been achieved. This shortfall will push for faster investments.
“The strong pipeline in power T&D is creating a revenue opportunity of ₹70,000–75,000 crore for the transformer sector through this and the next fiscal,” said Rahul Guha, senior director, CRISIL Ratings.
Order books will extend to over a year’s sales, up from nine months, ensuring solid sales visibility.
CRISIL said capacity utilisation will exceed 80% by the next fiscal. This will raise working capital needs and push capex to ₹200 crore.
Companies will likely take on more debt, but stable credit profiles are expected thanks to strong balance sheets and rising cash flows.
Replacement demand will also grow, as transformers installed during 2000–05 reach the end of their 25-year life. Operating margins will remain at 8–10%, with no aggressive bidding in sight.
“Despite higher debt, gearing and interest coverage ratio will likely stay stable at 0.6x and 4x,” said Nitin Kansal, director, CRISIL Ratings.
However, CRISIL flagged timely payments, order award pace, and bidding aggression as key watch points.
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