Synopsis: India’s T&D sector continues to lead the capital goods space, supported by strong ordering activity, expanding execution, improving profitability and a long-term transmission investment pipeline driven by energy transition needs.
India’s Transmission & Distribution (T&D) sector is emerging as one of the strongest beneficiaries of the country’s accelerating power infrastructure buildout. Rising electricity demand, rapid renewable energy additions, grid modernization initiatives and increasing investments in transmission networks are driving a multi-year growth cycle for the sector.
With large-scale spending planned for renewable integration, thermal capacity additions and emerging HVDC projects, T&D companies are witnessing strong order inflows, expanding execution opportunities and improving profitability, positioning the sector at the center of India’s long-term energy transition and infrastructure development story.
T&D Remains the Key Driver of the Capital Goods Cycle
The Power Transmission & Distribution segment continues to outperform other industrial sectors, supported by robust demand from renewable energy integration and grid expansion. HV T&D companies reported order inflows growth of 51.8 percent, revenue growth of 36-37 percent YoY and EBITDA margin expansion of 220 basis points to 19.9 percent , reflecting strong execution, favorable pricing and operating leverage. Record-high order books and healthy demand visibility continue to support the sector’s growth outlook.
Massive Transmission Capex Pipeline Strengthens Visibility
While power T&D remains the strongest structural growth driver, supported by the Central Electricity Authority’s roadmap to achieve 900 GW of non-fossil capacity by FY36, the broader capital goods sector is also witnessing early signs of a private capex recovery. The roadmap implies around Rs. 7.93 trillion of transmission capex, extending the earlier Rs. 9.2 trillion FY22–FY32 transmission plan and providing long-term visibility for transformers, GIS, HVDC equipment and transmission EPC companies.
Although PGCIL has guided for a modest ~6 percent capex CAGR over FY26–FY28E, accelerating ordering activity and a healthy bid pipeline indicate potential upside. Beyond power, enquiry levels are improving across metals, oil & gas, data centres, semiconductors and electronics, supported by the RBI’s capacity utilisation factor remaining above 75 percent . While investments are still concentrated in select sectors and order conversion remains gradual, management commentary and project pipelines suggest the initial stages of a broader private capex upcycle
HVDC Opportunity Emerges as the Next Growth Frontier
A major growth catalyst is India’s expanding High Voltage Direct Current (HVDC) pipeline. The country is expected to have 15–20 HVDC projects in the coming years, with each project carrying an estimated value of Rs. 15,000–20,000 crore. Product supply alone could account for 40–50 percent of project value. Additional opportunities are emerging through 10 proposed Rajasthan-linked HVDC corridors and six potential corridors under the Brahmaputra transmission plan.
Renewable Energy and Power Demand Continue to Support Investments
India’s growing electricity demand remains a structural tailwind. To meet annual power demand growth of 6–7 percent , the country may need renewable energy additions of 35–40GW every year alongside thermal additions of 10–15GW. This increasing generation capacity requires substantial transmission infrastructure, ensuring continued investments in the T&D ecosystem over the coming decade.
Private Capex Shows Early Signs of Revival
Beyond power, broader industrial demand is gradually improving. Non-power industrial companies recorded modest revenue growth of 10 percent YoY, while order inflows increased 35.7 percent –36 percent YoY, driven by sectors such as metals, oil & gas, data centers, semiconductors, EVs and electronics manufacturing. RBI capacity utilization has reached 77.7 percent , a decadal high, indicating improving utilization levels and supporting the possibility of a wider private capex recovery.
Conclusion:
The outlook for the T&D sector remains highly encouraging, supported by sustained investments in power infrastructure, renewable energy integration and grid expansion. Strong order pipelines, improving execution and favorable industry dynamics continue to strengthen growth visibility for sector participants. At the same time, rising electricity demand, energy transition initiatives and expanding industrial activity are expected to keep transmission investments elevated. While broader industrial capex is gradually recovering, T&D remains the most visible and structurally attractive growth theme within the capital goods space.
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