Rajesh Power Names Odisha Next Market After Rs 212 Crore Win

Rajesh Power Services Limited has named Odisha its next growth market outside Gujarat after securing an about Rs 212 crore transmission order from Odisha Power Transmission Corporation Limited, while management cited more than Rs 16,000 crore of planned state spending on substations, underground cables and transmission lines over the next few years.

Why has Rajesh Power selected Odisha as its next market?

Rajesh Power has selected Odisha as its next geographic growth lever beyond Gujarat because management expects more than Rs 16,000 crore of transmission projects to be floated in the state over the next few years. Management said the state programme covers 765 kilovolt, 400 kilovolt and 220 kilovolt substations, underground-cable projects and transmission lines.

Management described the spending programme as an opportunity in its existing transmission capabilities, rather than a move into a new type of work. In August, it had heard that the Odisha government planned this investment, and it said Rajesh Power aims to be among the beneficiaries of that capital expenditure.

The Odisha opportunity contrasts with Rajesh Power’s established Gujarat activity. Management said annual distribution tendering momentum in Gujarat exceeds Rs 5,000 crore to Rs 6,000 crore, whereas the company’s current order book and bidding outside Gujarat are confined to transmission work. This means Odisha expansion is presently based on transmission projects, not distribution contracts.

What is Rajesh Power’s Odisha transmission order?

Rajesh Power’s disclosed Odisha order is valued at about Rs 212 crore and involves transmitting power through underground cable from one substation to another. Odisha Power Transmission Corporation Limited is the customer named by management for the contract.

The order was one of three major wins management highlighted. The other projects included work from Paschim Gujarat Vij Company Limited, or PGVCL, worth around Rs 800 crore to Rs 900 crore, and an order from Rajasthan Vidyut Prasaran Nigam Limited for a 132 kilovolt gas-insulated substation in Jodhpur and 132 kilovolt cable connectivity.

Those contracts show a split in Rajesh Power’s geographic activity. Gujarat contributes distribution-related work through PGVCL, while the Rajasthan and Odisha projects are transmission assignments. Management also said Rajasthan is performing well, but identified Odisha as the more important state outside Gujarat because of the planned investment pipeline.

How does Odisha change Rajesh Power’s geographic mix?

Odisha could help raise Rajesh Power’s outside-Gujarat order-book share from 12% toward management’s stated 15% to 20% trajectory over the next two years. Management said the share had already moved from around 10% to 12%, although it did not quantify Odisha’s current share of the order book.

The company said this diversification will occur through transmission rather than distribution. When asked whether it was pursuing distribution projects outside Gujarat, management said there was no such work in the current order book or bidding activity. Odisha’s planned substations, cable projects and transmission lines therefore fit the work Rajesh Power is currently seeking beyond its home state.

Management said the order book figures exclude goods and services tax, or GST, and represent core revenue-convertible orders. That distinction matters because the stated increase in the outside-Gujarat share relates to the company’s order book rather than a measure of invoiced revenue or completed projects.

How large is Rajesh Power’s bidding and execution base?

Rajesh Power reported a bid pipeline of around Rs 3,000 crore to Rs 4,000 crore, but management did not give a separate pipeline figure for Odisha. It said its order-win rate was more than around 60% when asked about orders won since April, while also describing a 50% to 60% range across geographies and business segments, including power transmission and distribution.

Management said the unexecuted order book was around Rs 3,600 crore plus about Rs 400 crore, with projects generally carrying execution timelines of 18 to 24 months. Some first-half order inflows are fresh, while others are carry-forward projects from the prior year, creating different completion dates within the same order book.

Many projects with February and March completion schedules are expected to finish before March, according to management. Other projects that had two-year timelines are planned for commissioning around September or October of the following year. Rajesh Power also said it expected to execute about Rs 1,200 crore to Rs 1,300 crore of order book over the next five months after September.

What financial assumptions does management attach to Odisha?

Management said Odisha’s working-capital and margin structure is similar to Gujarat’s. This was its response to a question on whether the new state would differ from the company’s Gujarat contract structure; management did not provide separate working-capital days, margin figures or payment terms for Odisha.

Rajesh Power maintained guidance for earnings before interest, tax, depreciation and amortisation, or EBITDA, of 11% to 12%, and profit after tax, or PAT, of 8% to 9%. Management said these ranges remained achievable despite import-price volatility, and it also maintained 40% revenue-growth guidance.

For the first half, management said revenue was Rs 929 crore, compared with Rs 638 crore in the prior-year first half. It said around Rs 150 crore to Rs 200 crore of the latest first-half revenue was booked in September, which contributed to a higher point-in-time trade-receivables balance. Management attributed improved working-capital management to increased trade credit from suppliers.

Conclusion

Rajesh Power’s Odisha strategy rests on an about Rs 212 crore state transmission order and management’s expectation that more than Rs 16,000 crore of projects will be offered in the state over the next few years. The plan broadens a business still weighted toward Gujarat, while retaining a focus on transmission assignments outside that market.

The next disclosed markers are the pace at which Odisha transmission tenders are floated, any additional orders Rajesh Power secures, and progress in lifting the outside-Gujarat order-book share from 12% toward the stated 15% to 20% range over two years. Management’s planned execution of about Rs 1,200 crore to Rs 1,300 crore over the next five months and its maintained 11% to 12% EBITDA and 8% to 9% PAT guidance are further measures to watch.