Rs 760 cr orders, 157% profit growth: An under-the-radar smallcap rides the global grid boom

With only around 22% of sanctioned transformers installed so far, implementation could create further demand for distribution equipment. At the transmission level, the National Electricity Plan (NEP) projects an investment outlay of around ₹ 9 lakh crore through 2032 to support grid expansion and modernisation. The NEP also envisages expanding the transmission network to 6.48 lakh circuit kilometres by 2032 and increasing transformer capacity to around 2,345 GVA.

Global demand is adding another layer of opportunity. Over 4 crore power transformers in the US are ageing and could trigger a multi-decade replacement cycle. So demand for transformers and parts is not just strong in India but surging globally. And several companies are tapping into this opportunity. Today, we focus on a small-cap stock that is tapping into this opportunity. It recorded a 157% growth in profits in the recently ended quarter.

And, to give a glimpse into the future, it has seen its order book nearly double. Other than this company, we also take a look at a relatively well-known stock from this sector. This company too has logged 100%+ profit growth and is firing all engines. FE Stock Insights on WhatsApPGet instant alerts on high-conviction investment themes and fundamental deep dives—direct from Financial Express.Join now #1 Yash Highvoltage: High-Voltage Bushings Eye Global Expansion and Growth Yash Highvoltage manufactures condenser-grade high-voltage, high-current transformer bushings.

It is India's only independent manufacturer of condenser-grade transformer bushings and is among fewer than 12 independent producers globally. The company has installed over 50,000 transformer bushings to date. The company produces Resin-Impregnated Paper (RIP), Oil-Impregnated Paper (OIP), resin-impregnated synthetic and High-Current transformer bushings (voltage ratings spanning 24 kV to 245 kV and current ratings up to 25,000 A).

The company also provides wall-through bushings, retrofit solutions, and on-site testing/repair services. Backlog Runways: Inside Yash’s ₹760-Crore Domestic and Export Pipeline Domestic sales account for 86%, exports 6% and Retrofit & Services 8%. The company’s order book has almost doubled to ₹760+ crore as of September 30, from ₹400 crore in the same period last year. This provides revenue visibility of about 15-24 months.

Note that the company reports half-yearly earnings ending September and March of every year. The company sold 35.6% more bushings, reaching 4,000 in H1FY27 compared to 2,950 in H1FY26. To capture higher margins, the company has shifted toward higher-voltage-class bushings, which command higher realisation per unit. This transition was led by RIP bushings, which contributed 86% of total revenue by value in H1FY27.

Operating Leverage: Why Margins Rose 480 Bps on 95% Revenue Growth Revenue grew 95% year-on-year to ₹194.5 crore in H1FY27, allowing fixed overheads to be absorbed over a much larger volume base. This expanded EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation) margins from 23.3% to 28.1% and net profit margins from 13.7% to 18.6%. Consequently, net profit surged 157% to ₹36.2 crore.

The Cash Conversion Cycle improved to 63 days (compared to 81 days at the end of FY26) due to tighter operational controls. Operating cash flow surged to ₹45.2 crore in H1FY27, compared to ₹4.8 crore in H1FY26. The company holds a net cash position of ₹95 crore as of September 30, 2026, with a near debt-free Debt-to-Equity ratio of 0.03. Management highlighted a favourable environment driven by global shortages of high-voltage transformer bushings.

The company benefits from both the Revamped Distribution Sector Scheme, under which only around 22% of sanctioned transformers have been installed so far, and the ₹9.15 lakh crore National Electricity Plan (NEP) transmission outlay through 2032. US Grid Replacement Cycle: Yash’s Roadmap to ₹1,000 Crore Revenue Management notes that ageing electrical grid infrastructure worldwide, including over 4 crore US power transformers past their design life, is triggering a multi-decade replacement cycle.

Renewable energy integration and data centre power demand require new step-up and power transformers, each needing 5 to 7 bushings. To capitalise on this opportunity, the company is commissioning a greenfield plant in H2FY27. This plant will add 6,000 units of annual capacity and increase the voltage rating to 550 kV. This paves the way for peak combined revenue of ₹1,000 crore. It is also in the trial phase to localise core manufacturing of RIP/RIS bushings which were previously 95%+ imported.

Global Export Playbook: Commercialising 550 kV Bushings via US Tie-Ups Yash has also established its dedicated sales and marketing subsidiary, Yash HV USA, to establish direct relationships with US utilities, transformer OEMs, and procurement engineers. Yash HV USA signed a 36-month representation agreement with key US sales agencies, including Ensales Electrical Associates, Inc., Gateway Power Sales and EV Solutions LLC.

Yash already maintains an active US order book, with order delivery schedules typically spanning 6 to 15 months. Current exports to North America consist primarily of OIP bushings. Once the greenfield plant becomes operational, Yash will begin exporting dry-type RIP/RIS bushings directly to North American and European markets for the first time. Yash High Voltage Share Price #2 Transformers and Rectifiers: Scaling Up to Capture Grid Expansion Demand Transformers and Rectifiers (India) Limited (TARIL) manufactures power, distribution, furnace, rectifier, and specialty transformers, as well as shunt and series reactors.

TARIL makes equipment across voltage classes ranging from 5 kV to 1,200 kV and capacities from 0.5 MVA to 500 MVA (and up to 1,200 kV class auto transformers). TARIL operates three integrated manufacturing facilities in Gujarat with a combined total capacity of 75,000 MVA. The expanded manufacturing infrastructure supports a top-line revenue potential of ₹5,000-6,000 crore. Operating Leverage: Why Q2 EBITDA Doubled on 61% Top-Line Growth In Q2FY27, revenue grew 60.7% year-on-year to ₹739.4 crore.

Higher capacity utilisation and operating leverage across manufacturing plants drove the revenue growth. EBITDA more than doubled to ₹128.7 crore, up from ₹58.8 crore in Q2FY26, for a 17.4% margin up from 12.8%. Net profit rose to ₹81.3 crore, up 116.8% year-on-year. TARIL expects FY27 revenue to grow by 25-28% to approximately ₹3,200 crore. Management expects the EBITDA margin to hover around 16%.

The order book stood at ₹7,237 crore as of Q2FY27, providing about two years of revenue visibility. High-voltage class transformers (400 kV and above) make up about 55% to 60% of the outstanding order book. Order Book Visibility: High-Voltage Transformers Drive ₹7,237-Crore Pipeline The order pipeline exceeds ₹21,000 crore. To tap global demand, it established a UK subsidiary in September 2026 to enhance customer support and local assembly, with plans to build a regional manufacturing base for European and UK markets.

TARIL regularly supplies transformers to major data centres in India and abroad. TARIL secured its first-ever nuclear power order from the Nuclear Power Corporation of India Limited. TARIL was awarded the contract to manufacture and supply 400 kV+ class Generator Transformers. It has also expanded into High-Voltage Direct Current and extra-high-voltage (EHV) grid solutions. Supply Chain Overhaul: How 85% In-House Components Expand FY29 Margins The company is scheduled to start commercial production from the expanded Changodar facility during Q3FY27.

Moreover, TARIL is building in-house component facilities that will cover 80% to 85% of its total raw material requirements, up from 10-15%. These components include continuously transposed conductors, bushings, insulation kits and fabrication units. This internal component supply is expected to boost EBITDA margins by 200 to 300 basis points. Margin gains will begin to be visible in FY28, and the full cost benefit is expected to be realised by FY29.

TARIL Share Price Valuation Divergence: Premium Bushing Monopoly vs Scaled Transformer OEM Yash Highvoltage commands stronger return ratios, with a return on capital employed (ROCE) of 28.6% and return on equity (ROE) of 23.5%. Its net profit has also grown at a 58% CAGR over the past five years. However, this performance comes at a premium valuation. The stock trades at 58.1x earnings, above its two-year median P/E of 51.7x and the industry median of 25.1x.

TARIL, meanwhile, has delivered faster profit growth, with net profit rising at a 106% CAGR over the same period. Its ROCE of 23.3% and ROE of 19.1% are lower than Yash Highvoltage's, but remain healthy. At 31 times earnings, TARIL trades below its historical median P/E of 38.6 times and close to the industry median of 31.3 times. Valuation Comparison (X)Price-to-Earnings MultipleReturn RatiosCompanyCompany5Y MedianIndustryROCE (%)ROE (%)Yash Highvoltage58.151.7 (~2Y)25.128.623.5TARIL31.038.631.323.319.1Source: Screener.in (Data as of October 22 2026) The next phase of growth for both companies will depend on execution.

Yash Highvoltage needs to ramp up its new facility, commercialise 550 kV bushings and build a larger export business. Localising key components could also support margins. TARIL, meanwhile, must translate its manufacturing expansion and in-house component production into better cost efficiency, while meeting delivery schedules across its large order book. Keep these stocks on your watchlist to see how they tap into upcoming demand.

1% profit growth: Why Hindustan Zinc still trades near its 52-week low Disclaimer: Note: Throughout this article, we have relied on data from and the company's investor presentation. Only in cases where the data were unavailable have we used an alternative, widely accepted and widely used 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.

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