Why Are FIIs Increasing Their Stake in GE Vernova and Transformers & Rectifiers?
GE Vernova : The Indian transformer industry is witnessing a massive transformation, fueled by increasing power demand, infrastructure growth, and rapid industrialization. As the nation continues to push for renewable energy and grid modernization, foreign institutional investors (FIIs) have recognized the immense potential in this sector. This has led to a steady increase in FII stakes in key transformer stocks such as Transformers and Rectifiers (India) Limited and GE Vernova T&D India Limited.
Why the Transformer Industry Is Gaining Attention?
The Indian power sector is at a crucial juncture, with an increasing need for efficient power transmission and distribution. The transformer market is expected to grow at a CAGR of 5.6% to 6.91% from 2025 to 2033, depending on the segment. The power transformer market is projected to reach $4.2 billion by 2033, while the dry-type transformer segment is set to expand at 6.7% CAGR from 2025 to 2030.
The push towards renewable energy integration, smart grids, and high-voltage transmission projects is creating significant opportunities for companies in this space. FIIs are particularly keen on companies that are capitalizing on these trends while maintaining strong financial growth.
1. Transformers and Rectifiers (India) Limited (TRIL)
Company Overview
Transformers and Rectifiers (India) Limited is a key player in manufacturing power, furnace, and rectifier transformers. The company provides power transmission solutions across multiple sectors, including utilities, industrial applications, and infrastructure projects.
Recent Performance & FII Stake Increase
- Market Cap: ₹11,979.6 crores
- Stock Surge: Nearly 7% to ₹416.8
- Revenue Growth (Q3 FY25): 192% YoY to ₹559 crores
- Net Profit Growth: 243.8% YoY to ₹55 crores
- FII Stake Increase: From 9.34% in Q2 FY25 to 11.08% in Q3 FY25 (+1.74%)
Growth Potential & Future Plans
- Revenue Target for FY25: ₹2,000 crores
- Revenue Target for FY26: ₹3,500+ crores
- Long-Term Target (FY29): $1 billion (~₹8,600 crores) at 44% CAGR
- EBITDA Margin Target: 17%+ by FY27
- Capex Plan: Increasing production capacity by 15,000 MVA by March 2025
TRIL is selective with its order intake, prioritizing high-margin and fast-payment projects. The company is focused on improving its product mix and maintaining a sustainable profitability trajectory. With strong revenue guidance and expansion plans, FIIs have identified TRIL as a high-growth stock in India’s power sector.
2. GE Vernova T&D India Limited
Company Overview
GE Vernova T&D India Limited, formerly known as GE T&D India Limited, is a leading player in power transmission and distribution infrastructure. The company specializes in ultra-high voltage (765 kV and beyond) transmission equipment, including power transformers, air-insulated switchgear (AIS), and gas-insulated switchgear (GIS).
Recent Performance & FII Stake Increase
- Market Cap: ₹35,539.3 crores
- Stock Surge: Nearly 4% to ₹1,415
- Revenue Growth (Q3 FY25): 28% YoY to ₹1,074 crores
- Net Profit Growth: 192% YoY to ₹143 crores
- FII Stake Increase: From 6.82% in Q2 FY25 to 12.04% in Q3 FY25 (+5.22%)
Growth Potential & Future Plans
- Capex Plan for FY25: ₹800 million (₹80 crores), with flexibility for further investments
- Expansion Strategy: Exploring brownfield projects at existing facilities
- STATCOM Market Participation: Addressable market size of ₹3,000-3,500 crores
- Export Growth: Balanced order book between domestic and international markets
With its expertise in grid modernization and high-voltage solutions, GE Vernova T&D India is positioned to benefit from India’s growing energy needs and infrastructure development. FIIs have taken note of the company’s strong financial growth, expansion plans, and leadership in transmission technology.
Why Are FIIs Increasing Stake in These Companies?
- Robust Industry Growth
- With India’s power transmission sector expanding rapidly, transformer manufacturers are poised for strong revenue growth.
- Strong Financial Performance
- Both TRIL and GE Vernova T&D India have reported exceptional revenue and profit growth, attracting investor interest.
- Expansion Plans & Capex Investments
- FIIs prefer companies that are investing in capacity expansion and product diversification.
- High Demand for Energy Infrastructure
- As renewable energy adoption increases, modern power grid solutions will be crucial, benefitting these companies.
- Government Policies & Renewable Push
- Policies promoting Make in India, smart grids, and energy efficiency provide long-term support to the transformer industry.
Financial Comparison
| Stock | Market Cap (₹ Cr.) | Revenue Growth (YoY) | Net Profit Growth (YoY) | FII Stake Q2 FY25 | FII Stake Q3 FY25 |
|---|---|---|---|---|---|
| Transformers & Rectifiers (India) Ltd | ₹11,979.6 | 192% | 243.8% | 9.34% | 11.08% (+1.74%) |
| GE Vernova T&D India Ltd | ₹35,539.3 | 28% | 192% | 6.82% | 12.04% (+5.22%) |
Conclusion
The transformer industry is one of the hottest investment themes in India right now, driven by rising power demand, industrial growth, and clean energy transitions. Both Transformers & Rectifiers India Limited (TRIL) and GE Vernova T&D India Limited have positioned themselves as key beneficiaries of this boom.
With rapid revenue growth, strategic expansion, and increasing FII interest, these stocks are likely to continue their upward trajectory. Investors looking for long-term value in the energy sector should closely monitor these companies as they gear up for sustained high growth in the coming years.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.