India faces a $130 billion power equipment shortfall. 3 stocks could benefit

$195-235 billion Electrical Equipment Market

Of the total consumption, the country produced US$50 billion worth of electrical equipment domestically in 2025. To meet rising demand, domestic production of electrical equipment could reach between US$195-235 billion by 2035, according to the McKinsey report (Wired for Growth: India’s Electrical-Equipment Opportunity).

The expansion of renewable energy, upgrades to power grids, the data center boom, and rising electricity demand will be the key drivers of growth.

The $130 Billion Manufacturing Gap

However, there is a catch. If India doesn’t expand domestic manufacturing, it will have to rely on imports. The McKinsey report points out that without growing domestic manufacturing, India could face a production shortage of over US$130 billion.

By 2035, this would result in the country relying on imports for over 70% of its electrical equipment needs, up from 33% in 2025 and 22% in 2020. If India successfully pivots to local manufacturing across the entire electrical equipment industry, import dependence could decline to below 14% by 2035.

Within this broader opportunity, McKinsey sees Transmission & Distribution (T&D) as the largest segment, accounting for nearly 40% of the market. Against this backdrop, this article analyzes three key companies with high levels of localization that are well positioned to benefit from India’s expanding T&D opportunity.

At a Glance: Comparing the Three Key Beneficiaries

Before diving into the individual companies, here’s a quick comparison of the three players best positioned to benefit from India’s localisation drive in the T&D segment.

Company	Localisation	Growth Driver	Major Capex	Order Book
Siemens	70-75% products manufactured in India	Data Centers, grid modernisation, industrial electrification	Expansion of the Goa medium-voltage & vacuum interrupter plant	₹6,060 crore (over 1 year revenue visibility)
CG Power	Indigenous transformers, bushings, and electronic components	T&D Expansion, renewables, import substitution	Transformer capacity from 65,000 MVA to 1,10,000 MVA+ new switchgear plant	₹12,644 crore (2+ years visibility)
GE Vernova	100% local sourcing of HVDC transformers	HVDC Projects, grid modernisation, localisation	₹1,000 crore capex: India’s first 765 kV GIS plant	₹21,460 crore (3+ years visibility)
Source: Annual Reports, Investor Presentation, Management Commentary

#1 Siemens: The 75% Localized Giant Powering India’s 20 GW Data Center Boom

Siemens Smart Infrastructure (SI) business covers electrification, power distribution, and building management systems. SI is one of Siemens’ fastest-growing divisions, driven by ongoing investments in Power Utilities, Renewable Energy Projects, Commercial Buildings (such as hospitals and malls), and Data Center.

Segment Dynamics: Short-Cycle Products vs. Engineered Solutions

Siemens serves the electrification market through two primary product sub-segments within SI. Electrical Products (Short-Cycle) covers product supplies, including low-voltage switchgear, with a portfolio of over 10,000 individual items.

Electrification and Automation (Medium-Cycle) covers more complex, engineered solutions such as medium-voltage switchgear, for which pricing and designs are negotiated on an order-by-order basis.

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The SI segment continues to be a primary growth engine for Siemens, fueled by strong demand across its electrification and automation portfolios. Segment revenue rose 11.6% year-on-year to ₹4,660 crore in the 6-month period ended March 2026.

This revenue growth was primarily driven by strong order execution across the Electrification, Automation, and Electrical Products businesses. Order booking was also strong with new orders surging by 22.9% year-on-year to ₹6,060 crore. This provides revenue visibility of little over a year.

However, despite top-line growth, EBITDA margin fell by 120 basis points to 15.1%. This margin compression was primarily driven by severe volatility in global commodity prices, which directly increased the segment’s material costs. During this period, the cost of copper jumped by 45%, and silver prices surged by 160%.

Localization and the Global Supply Chain Framework

A strategic advantage for the SI segment is its high domestic manufacturing. Approximately 70% to 75% of all SI products are localized and manufactured within India. This high localization rate insulates the segment from global supply disruptions and positions it within India’s domestic manufacturing framework.

The segment accounted for 55.5% of the company’s total revenue mix during the 12 months ending March 2026. Approximately 70% of its operations focus on products, and 30% on longer-term projects. The majority of Siemens’ revenue is generated domestically within India. Domestic sales accounted for 87.2% of revenue, while exports accounted for 12.8%.

The Logistics of Localizing: Inside Siemens’ Goa Expansion Plans

To support its strong order pipeline and future growth, Siemens is expanding its manufacturing footprint. Specifically, the expansion of the medium-voltage and vacuum interrupter plant in Goa is nearing completion and is preparing to commence commercial production.

Furthermore, Siemens’ Indian factories, including its Goa electrification facilities, are integrated into the global supply chain of its parent company, Siemens AG. This means the global parent continuously assesses global demand and actively allocates production quotas to Indian factories, positioning them as potential export hubs based on global capacity requirements.

Powering the Super-Cycle: Data Centers and Grid Modernization

Data Center is one of the fastest-growing verticals, making up approximately 12% to 15% of the SI order book. For these facilities, Siemens provides the core electrical infrastructure, simulation capabilities, and integrated building management systems.

Management sees significant market potential and projects that India’s data center capacity of around 1.5 gigawatts (GW) will rise to 18-20 GW in the coming years. Siemens captures roughly 10% to 20% of the total wallet share for Data Center projects.

Siemens is also receiving strong orders from state-level power utilities to modernize their grids, as well as from new renewable energy projects. Because power utility funding is largely driven by state governments, Siemens does not currently anticipate a slowdown in ordering, even if the central government faces fiscal constraints.

Siemens also secured an order for a leading semiconductor OSAT (Outsourced Semiconductor Assembly and Test) facility in Gujarat. For this project, Siemens provided the complete power distribution and facility management systems, seamlessly integrating them with factory automation, software, and IT-OT cybersecurity.

Siemens Share Price

#2 CG Power: Inside Massive Indigenization Push

CG Power’s Power Systems business specializes in T&D services. It provides a suite of products, solutions, and turnkey services for utilities, industries, railways, and renewable energy sectors. The company manufactures a wide array of power and distribution transformers ranging from 160 kilo-Volt-Ampere (kVA) to 1500 Mega-Volt-Amperes (MVA) and up to 1200kV.

FY26 Financial Performance: Revenue Surges Amid Margin Shifting

The Power Systems segment was a primary growth engine for CG Power in FY26, driven by high operating leverage and margin expansion. The segment’s total sales rose by 46% year-on-year to ₹5,138 crore. Profit before interest and taxes grew 68% to ₹1,123 crore, while margin expanded by 281 bps.

The unexecuted order backlog as of 31 March 2026 stood at ₹12,644 crores, up 91% YoY. This provides the company with strong revenue visibility of over two years. Looking ahead, the company expects to capture this domestic T&D opportunity.

Import Substitution and Indigenous Engineering Breakthroughs

CG Power is reducing its own reliance on imports and developing indigenous technologies, which perfectly aligns with the national push for self-reliance. This focus on import substitution has led to reduced lead times, FOREX savings, and enhanced order inflow. For instance, order inflow of power business in FY26 rose by 69% to ₹11,210 crore.

In indigenous developments, CG Power became the first Indian company to successfully design, develop, and type-test RIP condenser bushings (36kV to 145kV), advancing India’s self-reliance in critical power equipment manufacturing.

The company has substituted imported electronic components for traction converters, resulting in a 5% savings in material costs. They have also developed BLDC Hub motors for E-cycles as an import substitute. It has also established an Outsourced Semiconductor Assembly and Test facility in Gujarat, strengthening domestic supply chains for essential electronic components.

Scaling Transformer Capacity to 110,000 MVA by the end of 2026

To absorb the domestic and export demand, CG Power is aggressively scaling its manufacturing capacity across both major T&D product lines. After increasing its transformer capacity from 18,000 MVA to 65,000 MVA, it is adding another plant. This expansion will increase the total capacity to 110,000 MVA by the end of 2026.

The company is also setting up a greenfield switchgear capacity. This expansion aims to capitalize on the anticipated rise in demand for Medium-Voltage and Extra-High-Voltage circuit breakers, instrument transformers, and GIS. CG Power’s business also serves the renewable energy sector.

To this end, the company’s clean energy vertical manufactures Gas Insulated Switchgear up to 245kV and is developing a new 400kV system. It also makes high-efficiency, eco-friendly Green Transformers that use biodegradable ester oils to support the grid infrastructure.

CG Power Share Price

#3 GE Vernova T&D: Inside ₹1,000 Crore Blueprint to Replace Imported Grid Hardware

GE Vernova is also well-positioned to capitalize on India’s shift towards domestic manufacturing. The company has a multi-decade legacy of localizing critical grid infrastructure. It pioneered the domestic production of Extra High Voltage 765 kV AC technology, Gas Insulated Switchgear up to 765 kV, and 800 kV High Voltage Direct Current (HVDC) systems.

Capital Expenditure: Executing a ₹1,000 Crore Local Capacity Blueprint

To capture the strong demand and reduce reliance on imports, it is investing in expanding its local manufacturing footprint, engineering capabilities, and product portfolios. GE Vernova plans to invest over ₹1,000 crore by 2028 to expand its capacity across product lines.

This will be directed towards setting up India’s first dedicated 765 kV GIS manufacturing plant. The Tamil Nadu facility will add disconnectors and drives. Disconnectors are a vital part of transmission networks. It is reviving this product line locally to meet strong customer demand for high-quality domestic alternatives.

This investment will increase the capacity of transformers and reactors by 50%, and also boost the capacity of both Air-Insulated Switchgear (AIS) and GIS by 25%.

Supply Chain Overhaul: Reaching 100% Domestic HVDC Sourcing

India plans to build around 20 HVDC projects between FY24 and FY32 to connect renewable energy to the power grid. Here, GE Vernova has increased local manufacturing of its HVDC equipment to align with the government’s push for domestic production.

Until 2012, HVDC projects only sourced about one-third of their transformers domestically. GE Vernova has upgraded its supply chain and capacities to now supply 100% of transformers for these projects directly from its Indian factories.

The company is now expanding its Pallavaram facility to incorporate new manufacturing lines for ‘Line Commutated Converter HVDC valves’, ‘Voltage Source Converter STATCOM valves’, and related products. Additionally, it is establishing an engineering platform in India to ensure that HVDC controls can be delivered directly from within the country.

To further enhance local value-added, it plans to establish a dedicated air-core reactor facility in India. Beyond physical hardware, GE Vernova is also localizing advanced digital and green technologies needed for modernizing the grid.

The company is at the forefront of localizing and offering SF6-free high-voltage switchgear using its proprietary G3 (Green Gas for Grid) technology. G3 reduces greenhouse gas emissions by around 99%. It is deploying its modular GridOS software and Asset Performance Management solutions.

Record Backlog: FY26 Earnings Explode as Order Book Hits ₹21,460 Crore

Its order book provides strong revenue visibility. As of 31 March, 2026, GE Vernova’s total order book reached a record high of ₹21,460 crore, up 70% YoY. This provides a revenue visibility of over three years. Financially, its revenue grew by 45% YoY to ₹6,206 crore. EBITDA more than doubled to ₹1,684 crore from 831 crore in FY25. Net profit doubled to ₹1,233 crore.

GE Vernova Share Price

Screener Analysis: Do Premium Multiples Justify the CapEx Runways?

GE Vernova’s return ratios (Return on Capital Employed and Return on Equity) are the strongest in the industry, followed by those of CG Power and Siemens. Significant operating leverage, cost control, efficiency, product mix, and private-sector exposure (98% of order backlog) enable an efficient business of GE Vernova.

In terms of valuation, all three companies are trading at a premium to both their 5-year historical multiples and the industry median. However, Siemens trades at a moderate and favourable multiple on a standalone basis. Whereas the other two are valued at a premium.

The high valuations reflect investor optimism regarding the long-term opportunity from rising power demand and policy tailwind. To justify these premiums, they will need to consistently deliver on order inflows, execution, and margins. Any miss on these fronts could affect their share prices.

Valuation Comparison (X)
Company	P/E	5Y Median P/E	RoCE (%)	RoE (%)
Siemens	55.4	49.4	21.2	16.3
CG Power	123.0	79.6	27.0	20.8
GE Vernova	103.0	102.7	76.4	57.3
Industry Median	36.1	NA	23.8	18.6
Source: Screener.in (Data as of 17 June 2026)

To conclude, undoubtedly, India’s electrical equipment market could grow from US$50 billion to US$195-235 billion. But achieving this depends on expanding domestic manufacturing and avoiding the projected US$130 billion production gap.

Companies such as Siemens, CG Power, and GE Vernova are already big players in the industry and are well-positioned to benefit from this structural T&D investment cycle. However, with valuations already reflecting high expectations, these names could be kept in your watchlist.

Disclaimer:

Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data were not available have we used an alternative, widely used, and accepted source of information.

The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.

About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.

A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.

Disclosure: The writer and his dependents do not hold the stocks discussed in this article.

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