Supreme Power Equipment Powers Ahead: Strong H1 FY26 Performance and Ambitious Expansion

Supreme Power Equipment Limited, a prominent manufacturer of power and distribution transformers, has reported a robust financial and operational performance for the first half of fiscal year 2026 (H1 FY26). The company, which recently listed on the NSE Emerge Platform in December 2023, continues to demonstrate strong growth trajectory, underpinned by strategic expansions and a healthy demand environment in the Indian power sector. For H1 FY26, the company's consolidated total income surged by 28.58% year-on-year to INR 75.36 crore. This impressive top-line growth translated into even stronger profitability, with consolidated Profit After Tax (PAT) increasing by 31.98% year-on-year to INR 9.41 crore. The EBITDA for the period stood at INR 14.27 crore, reflecting an 18.63% year-on-year growth, while the net profit margin improved to 12.49%.

This strong financial showing is a direct reflection of Supreme Power Equipment's operational momentum and its strategic initiatives to deepen market penetration. The company secured 14 major domestic orders during H1 FY26, accumulating a cumulative value of INR 175.61 crore. As of September 30, 2025, the order book stood at a healthy INR 230 crore, providing significant revenue visibility. Key orders include those from established utilities like Tamil Nadu Transmission Corporation Limited (TANTRANSCO) for a 50 MVA, 110/33 kV power transformer valued at INR 4.15 crore, and Kerala State Electricity Board (KSEBL) for five 25 MVA, 110/22 kV power transformers worth INR 15.25 crore. Furthermore, the company, through its 90% subsidiary Danya Electric Company, secured an INR 4.48 crore order from Tamil Nadu Power Distribution Corporation Limited (TNPDCL) for distribution transformers. These repeat orders underscore Supreme Power Equipment's enduring relationships with key state utilities and its strengthening presence in the high-voltage segment.

Supreme Power Equipment's strategic expansion into new geographies and sectors has been a significant growth driver. The company successfully entered the Telangana market, securing an INR 19.82 crore order from an EPC company for eight 20 MVA, 110/33-11 kV power transformers. This marks a crucial milestone in expanding its geographic reach across South India. Concurrently, the company made its debut in the steel industry by securing its first major industrial order from a reputed steel plant in Kerala for a 31.5 MVA, 110/22 kV power transformer. This demonstrates its capability to cater to specialized industrial requirements. The launch of higher-capacity power transformers (20 MVA, 66/11 kV and 110/33-11 kV) further expands its product portfolio, addressing evolving market needs. The company also strengthened its presence in the renewable energy sector, securing an INR 9.03 crore order for 55 MVA and 85 MVA power transformers for a leading solar project developer.

Strategic Expansion: Fueling Future Growth

At the core of Supreme Power Equipment's future growth strategy is its transformative expansion project. The company is developing a state-of-the-art manufacturing facility spanning 6 acres, designed to significantly enhance its production capabilities. This expansion aims to increase the annual manufacturing capacity from the current 2,500 MVA to a substantial 9,000 MVA, representing an increase of 6,500 MVA. This enhanced capacity will enable the company to manufacture a broader range of transformers, from 25 MVA up to 160 MVA, catering to a wider market segment with less competition. The project is progressing well, with approximately 70% completion as of March 2025. The new facility is expected to be fully operational by December 2025, with commercial production commencing in January 2026. Management anticipates this expansion will unlock an annual revenue potential of INR 500-550 crore at full capacity, contributing to a projected 10-30% year-on-year revenue growth and improved profit margins through efficiency gains. The funding for this expansion is a mix of IPO proceeds, internal accruals, and loans of INR 35-40 crore.

Industry Tailwinds and Outlook

The Indian transformer industry is experiencing robust tailwinds, driven by the nation's ambitious power sector growth and renewable energy targets. The global transformers market is projected to reach USD 124.19 billion by 2034, growing at a CAGR of 7% from 2024. India's transformer market alone is expected to grow from USD 3.97 billion in 2023 to USD 8.41 billion by 2030, at a CAGR of around 10.84%. This growth is fueled by large-scale integration of renewable energy sources, expanding urban infrastructure, and government initiatives for substation upgradation and transmission strengthening. India's installed power capacity stood at 446.18 GW as of June 30, 2024, with significant contributions from renewable energy. The country also has an aggressive substation expansion plan, with 12,192 new substations planned between 2022-23 and 2029-30, adding 1,41,522 MVA capacity.

Management remains highly confident in the demand outlook, stating that the transformer industry will see high demand for the next 3 to 5 years, and globally for the next 10 years. They are strategically controlling exposure to government orders, aiming for less than 50% from government and the balance from private tenders, to ensure cash flow stability. In FY25, 74% of the company's revenue was generated from private tenders. Despite potential raw material cost pressures, management expects to sustain a 10-12% margin, focusing on larger power transformers where competition is lower. The company is actively pursuing a bidding pipeline exceeding INR 600 crore, with a historical winning rate of 10-15%. The company's proactive approach to capacity expansion, product diversification, and market penetration positions it well to capitalize on these favorable industry dynamics.

Conclusion: Powering Towards a Brighter Future

Supreme Power Equipment Limited's H1 FY26 performance underscores its strategic clarity and disciplined execution. With a robust order book, significant capacity expansion, and a diversified market approach, the company is well-positioned to leverage the immense opportunities in India's growing power and renewable energy sectors. The management's focus on operational efficiency, product quality, and customer trust, combined with its proactive stance on market trends, reinforces its commitment to delivering long-term value to all stakeholders. The company's recognition with the MSME Ratna Awards 2025 for 'Sustainable & Green MSME Award' further validates its commitment to excellence and sustainable practices.