India's push to expand its power transmission network is driving demand for transformers, switchgear and grid equipment, helping shares of some electrical equipment makers rise as much as 94% in 2026.
The investment cycle comes as the government targets 500 gigawatts of renewable energy capacity by 2030, with industry discussions pointing to a potential increase to 900 GW by 2035. Expanding generation capacity will also require large investments in transmission and distribution infrastructure to move electricity across the country.
India is expected to invest nearly Rs 9 lakh crore in transmission infrastructure by 2032, according to the report. Transformer makers are expected to benefit because every 1 GW of new power generation requires transformer capacity to increase by eight to 11 times across voltage levels.
The report examined two companies whose shares have risen 94% so far in 2026: Atlanta Electricals and Quality Power.
Atlanta Shifts Focus To EHV
Atlanta Electricals manufactures power transformers, auto-transformers and inverter-duty transformers. The company operates five manufacturing facilities with a combined capacity of 63,060 MVA and supplies equipment to state electricity grids, private companies and renewable energy projects.
The company reported a 49% rise in FY26 revenue to Rs 1,852 crore. EBITDA increased 78% to Rs 344 crore, while margin improved to 18.6%. Net profit rose 70% to Rs 202 crore.
Atlanta said return on capital employed stood at 34%, while return on equity was 22%. The company also repaid Rs 340 crore of term loans and became debt-free. Power transformers accounted for 81% of revenue in FY26, while products in the 220-kV class and below contributed about 52%.
The company is shifting towards extra high-voltage, or EHV, transformers in the 400-kV and 765-kV categories from the lower-margin 220-kV segment. According to the report, EHV transformers offer margins that are about 200 basis points higher.
The report said the shift to higher-margin EHV products may have contributed to Atlanta's 94% share-price rise in 2026. The segment also has high entry barriers because of capital requirements, technical partnerships, safety approvals and government clearances.
Atlanta received Power Grid approval on April 2, 2026, and secured its first 400-kV order. The company expects meaningful revenue contribution from the segment to begin in FY27. Its order book stood at Rs 2,493 crore, providing revenue visibility for the next 12 to 18 months. Management has targeted 40% compound annual growth over the next three years.
Renewable Energy Demand
Atlanta is also expanding into battery energy storage systems, renewable energy, EV charging infrastructure and data centres. The company said it is in discussions with potential customers for data centre-related business.
The company is setting up a dedicated manufacturing facility, Unit 6, for inverter-duty transformers ranging from 0.60 kV to 33 kV. Management expects the facility to become operational in 2026 and add 5,000 MVA of production capacity for renewable energy and EV charging markets.
Atlanta has also started backward integration to manufacture tanks and radiators internally. The company said its use of green transformers with natural and synthetic ester oils helped maintain production schedules during global mineral-oil shortages in Q4FY26. About 75% of its order book includes price-variation clauses linked to raw material costs such as copper and steel.
Quality Power Expands Capacity
Quality Power manufactures high-voltage grid connectivity equipment, including dry-type reactors, instrument transformers and active power quality systems such as battery energy storage systems and STATCOMs. The company works with GE, Hitachi and Siemens.
FY26 revenue rose 157% to Rs 1,007 crore, while EBITDA increased 98% to Rs 236 crore, with margin at 23.5%. Net profit climbed 85% to Rs 186 crore. The company reported return on capital employed of 39.8% and return on equity of 26.6%, while debt-to-equity ratio stood at 0.05 times.
The company's order book reached Rs 1,406 crore, or about 1.4 times FY26 revenue. Management said the company is now focused on stabilising operations, strengthening workforce capabilities and completing capacity expansions before the next phase of growth.
Quality Power is building a global coil manufacturing facility in Sangli, with trial production expected by August 2026. The company is also developing a 765-kV product category and gas-insulated switchgear infrastructure at its Bhiwadi plant. Management expects the first GIS prototype to be ready by August 2026.
The Bhiwadi expansion is expected to increase plant capacity by about 45%, while expansion at the Cochin facility was completed in Q3FY26.
Data Centre Opportunity
Quality Power is also expanding into grid-scale energy storage systems. The company has developed its own power conversion systems and expects to launch a 1,725-kilowatt PCS inverter within the next two quarters. Its Turkish subsidiary, Endoks, is building a greenfield facility to manufacture the product.
The company is also building a facility for HVDC CTC magnet wire production, scheduled to become operational in Q3FY27. Separately, it is targeting demand from global data centres and supplying backup power equipment to clients in the US, Europe and the Middle East.
Management said the company's ability to meet demand is currently limited by capacity constraints, which are expected to ease after the Sangli expansion. Quality Power is also increasing vertical integration by entering cable manufacturing and evaluating long-term insulator supply arrangements to reduce execution delays.
Management expects revenue growth of 15% to 20% in the near term while new capacities stabilise, with faster growth expected once the facilities become fully operational.
Valuation Risks
The report said Atlanta and Quality Power trade at price-to-earnings multiples of 66 times and 70 times, respectively. It added that execution, capacity ramp-up and order conversion will remain key to sustaining valuations after the sharp rally in their shares.
The report also flagged risks from higher copper and aluminium prices, which could pressure margins and profitability amid commodity inflation.
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