Power transmission sector poised for strong growth on ₹9-lakh crore investment pipeline: Motilal Oswal

India’s power transmission sector is entering a major growth phase, supported by an investment pipeline of nearly ₹9 lakh crore under the National Electricity Plan (FY23–32), according to a report by Motilal Oswal Financial Services. 

The brokerage said transmission equipment is set to play a critical role in India’s expanding energy ecosystem as the country ramps up investments in electricity transmission, distribution, and consumption infrastructure. 

Investment cycle driving growth 

The report said that the current capex cycle, which began around FY22–23, has already started benefiting companies in the transmission and distribution segment. 

Order books have strengthened, revenues have risen, and profitability has improved across the sector. This momentum is expected to continue over the coming years, backed by sustained domestic demand and growing export opportunities. 

Renewable push to fuel demand 

A key growth driver is India’s aggressive renewable energy expansion plan, which requires significant upgrades to grid infrastructure. 

Even partial achievement of national transmission targets is likely to create sizable opportunities for equipment manufacturers, the report said. 

While order activity moderated in FY26 due to temporary constraints such as high-capacity utilisation and longer manufacturing timelines for advanced equipment, demand fundamentals remain robust and are expected to improve as fresh capacities come online. 

Shift towards high-voltage systems 

The report highlighted increasing demand for high-voltage and technologically advanced transmission systems, particularly high-voltage direct current (HVDC) projects. 

HVDC systems are crucial for long-distance electricity transmission and renewable energy integration. A strong project pipeline in this segment is expected to ensure healthy order inflows over the next few years. 

Indian manufacturers are also likely to benefit from a widening global supply gap in transformers. Demand in markets such as the US and Europe has surged due to renewable energy additions, rising data centre investments, and broader electrification trends. 

With global supply struggling to keep pace, Indian companies are emerging as important suppliers, creating a strong export growth opportunity. 

Capacity expansion underway 

Despite rising demand, transformer manufacturing capacity remains constrained in the near term, resulting in longer delivery schedules. To address this, leading players are undertaking major capacity expansion plans, which are expected to become operational over the next two to three years. This is likely to ease supply bottlenecks and support long-term sector growth. 

The report also pointed to rising investment in battery energy storage systems (BESS), driven by the need to maintain grid stability as renewable energy generation increases. 

India is targeting a sharp increase in storage capacity over the next decade, which is expected to generate additional demand for transmission equipment and related infrastructure. 

Motilal Oswal maintained a positive outlook on the sector, citing strong domestic investments, rising export opportunities, and evolving energy requirements. Although valuations have increased, the report said further earnings growth and export-led expansion could continue to sustain investor interest.