India’s power transmission and distribution (T&D) sector has quietly moved to the centre of the country’s energy transition story.
As renewable capacity scales up and electricity demand deepens across industries, data centres, railways, and urban infrastructure, the grid is being asked to do far more than just transmit power.
The government has also outlined a ₹2.4 lakh crore transmission capex plan by FY30. This aligns with India’s 500 GW renewable energy target. The objective of this capex is to deliver large quantities of renewable energy (solar and wind) from resource-rich states (such as Rajasthan and Gujarat) to load centres across the country.
Companies exposed to T&D are benefitting from a rare combination of domestic policy support and global demand. This structural tailwind is already visible in rising order inflows, multi-year backlogs, and improving execution across the sector. This article highlights three such T&D stocks with one of the highest order books in the sector…
#1 Hitachi Energy: The High-Margin Grid Architect
Hitachi Energy India is an electrical equipment player in sustainable energy solutions through grid technology, digitization, and integrated systems. The company is a key player in strengthening energy security. The company has shown exceptional growth momentum, mainly in the second quarter of FY26.
The ₹29,413 crore order book
Hitachi’s order book stood at ₹29,413 crore at the end of September 2025. This large backlog offers significant revenue potential over the next several quarters, provided the work pipeline remains stable. The management aims to leverage this order backlog to maintain high growth momentum.
Renewables (40%) and Rail & Metro (61%) order books saw good year-on-year order growth. The company maintains a growth-lever strategy focused on exports, which currently accounts for 25-30% of its order book. Geographies served include Europe, Southeast Asia, the Middle East, and North America.
The 500% Profit Surge
In terms of financials, the company’s revenue rose 23.3% year-on-year to ₹1,915 crore in Q2 FY26, driven by strong execution of the order book. Profit after Tax (PAT) increased by about 5X to ₹264 crore, from ₹52 crore in the same period last year. The profit increase was driven by a near doubling of EBITDA margins from 8.1% to 15.2%.
The Data Center Moat
Looking ahead, the company views the emergence of gigawatt-scale data centers as a major opportunity. It estimates the addressable market for these facilities, including grid connections, substations, and all transformer sizes, at 15% to 20% of total data center capex.
India’s ₹2.4 lakh crore transmission plan aims to connect renewable-rich states with demand centers to support a 500-gigawatt (GW) goal. Management anticipates that two to three HVDC projects per year will be required to manage grid complexity over the next several years.
To meet the rising demand, Hitachi is undertaking massive capacity expansions. The company is deploying around ₹2,000 crores to expand its manufacturing footprint. Expansion projects are underway in Chennai, Bengaluru, Mysore, and Vadodara (Maneja).
#2 Kalpataru Projects: The Multi-Vertical Powerhouse
Kalpataru Projects, formerly known as Kalpataru Power, is a prominent global engineering and construction (EPC) company. It is a leading player in energy and infrastructure projects. It operates across six high-growth business verticals, maintaining a diversified portfolio.
This includes power transmission and distribution (T&D), which remains a major growth driver. Other verticals include oil and gas, water, railways, and urban infrastructure. It has a global footprint, with projects executed across 75 countries and live operations in over 30 countries.
Three Years of Visibility
As of Q2 FY26, it reported a record consolidated order book of ₹64,682 crore, providing revenue visibility of about 3 years, based on FY25 revenue of Rs 22,316 crore. It is also the Lowest bidder (L1) in additional projects worth ₹5,000 crores. T&D accounted for 40% (₹26,275 crore) of the total order book.
The order book is split between 71% domestic (India) projects and 29% international projects. However, the current FY26 order intake shows a shift in international momentum, with 63% of new orders being international and 37% domestic. Kalpataru financials also remained strong.
Revenue grew 31% year-on-year to ₹6,529 crore in Q2 FY26. T&D revenue grew 51% to ₹3,031 crore, driven by improved execution. Core EBITDA increased by 28% to ₹561 crore, with an 8.6% margin. PAT expanded by 89% to ₹237 crore. Like Hitachi, Kalpataru also aims to capitalise on the global megatrend in the T&D segment.
Digital Infrastructure Play
The shift toward renewables and the modernization of energy distribution networks are driving strong demand in the T&D sector. The company is also expected to benefit from the rise of AI and digital infrastructure, which is creating a market for data centers and smart city cabling.
#3 KEC International: The Desert Windfall
KEC International, a part of the R P Goenka Group, is a leading global EPC company. KEC operates in several critical infrastructure segments, including T&D, Transportation, Renewables, Oil & Gas Pipelines, and Cables. It maintains a massive global footprint, operating in over 110 countries.
T&D remains the company’s “key growth engine,” accounting for 65% of total revenue in the first half of FY26. KEC is a market leader in the Middle East. It recently received its largest-ever EPC order (over ₹3,100 crore) in the UAE and a substation order (over ₹1,000 crore) in Saudi Arabia.
The ₹39,325 crore order book
T&D revenue rose by 44% year-on-year to ₹4,080 crore in Q2FY26. Operationally, the business continues to maintain profitability with double-digit EBITDA margins. T&D accounted for 65% of the total order book of ₹39,325 crore as of September 2025. It also expects to win tenders from an order pipeline of over ₹180,000 crore.
The T&D business is benefiting from the government’s focus on renewable energy evacuation corridors and green energy transmission. KEC is currently working on five high-voltage direct current (HVDC) projects, including a large converter station and four transmission lines. Despite the growth, the domestic market faces delays in project completion.
The Manufacturing Edge
To support this large project volume, KEC is expanding its manufacturing capacity. Expansion of the Butibori Tower facility in Nagpur is underway and is expected to be completed by the end of the year. This follows successful expansions in Dubai, Jaipur, and Jabalpur.
From a financial perspective, revenue increased 19% year-on-year to ₹6,092 crore, driven by execution of the order book. T&D accounted for 67% of the total revenue. EBITDA rose by 34% to ₹430 crore, while margins expanded by 80 bps to 7.1%. PAT also grew by 88% to ₹161 crore.
Have Valuations Corrected?
The Return on Capital Employed (RoCE) of all three companies is decent, indicating strong returns on capital invested. But, Return on Equity (RoE) lags due to a capital-heavy business. In terms of valuations, after the recent correction, they are trading at a discount to their historical median multiple but remain above the industry median.
| Peer Comparison (X) | |||||
| Company | P/E | 5Y Median P/E | Industry Median P/E | RoCE (%) | RoE (%) |
| Hitachi | 111 | 177 | 45.7 | 19.4 | 13.8 |
| Kalpataru | 23.2 | 22.6 | 17.7 | 16.0 | 10.0 |
| KEC | 26.9 | 40.1 | 17.7 | 18.0 | 12.0 |
| Source: Screener.in | |||||
The transmission and distribution theme reflects a long-term structural investment cycle. Policy support and budget-backed spending provide sustained visibility for project execution. Rising renewable capacity continues to drive grid expansion and modernisation needs.
Data centres, railways, and urban infrastructure add incremental demand. Strong order books support revenue growth across multiple years. However, dependence on the government for order inflows could be a risk if order flow slows.
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 alternate, 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.
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