TD Power Systems: Are Data Centres Quietly Driving the Company’s Entire Growth?

Synopsis: TD Power Systems is seeing strong momentum led by rising global demand from data centres. FY26 order inflows grew 51% YoY, with ~80% from exports, mainly gas engine and turbine orders from US OEMs. Their Q4 inflows jumped 61% YoY. While industrial and oil & gas segments also contribute, data centres are becoming a key growth driver for the company.

The shares of a Small-cap company specialising in the design and manufacturing of custom-engineered AC generators and electric motors, serving global industries like power generation (hydro, steam, gas) and industrial applications, are in focus as Data Centres are Quietly Driving TD Power Systems’ Entire Growth Engine, and in this article, we also look at how they are driving its growth, and their Q4 results and others.

With a market capitalization of Rs. 20,280.79 crores in the day’s trade, the shares of TD Power Systems Ltd rose upto 12.7 percent, making a high of Rs. 1,335.55 per share compared to its previous closing price of Rs. 1,184.05 per share.

Data Centres and Exports Power TD Power Systems’ Growth Momentum

TD Power Systems Ltd, engaged in the design and manufacturing of custom-engineered AC generators and electric motors serving global industries, is in the spotlight as it has been observed that data centres are quietly driving the company’s entire growth engine.

Around 80 percent of FY26 order inflows came from exports, while the domestic business remained largely flat. This highlights the company’s increasing dependence on international markets for growth, with overseas demand continuing to outpace the domestic segment.

The key growth driver remains export orders for Gas Engines and Gas Turbines, supported by rising global demand for reliable power solutions from data centres. With AI-led infrastructure expansion accelerating worldwide, the company is emerging as one of the cleanest listed proxies to the global data centre and AI capex cycle.

Benefiting from Data Centre Expansion

The Gas Engine Generator segment continued to see strong traction with large repeat orders from leading global OEMs across multiple ratings. Demand remains primarily driven by US data centre applications, alongside distributed power and industrial use cases, supporting a diversified demand base. 

The company also benefited from higher volumes in standardised programs, improving scale, operational efficiency, and capacity utilisation, while a breakthrough prototype order from a global OEM opened opportunities for long-term platform business.

In the Gas Turbine segment, the company secured significant orders from a major US-based global OEM, strengthening long-term program visibility. Growth is being supported by expanding data centre infrastructure as well as oil & gas and industrial applications across the USA, Middle East, and Latin America, positioning TDPS as a strategic global manufacturing partner in high-volume export-driven programs.

Orderbook Overview

TD Power Systems reported strong momentum in order inflows, with Q4 FY’26 inflows rising 61% YoY to Rs. 6,665 million versus Rs. 4,134 million earlier. For the full year FY’26, order inflows grew 51% YoY to Rs. 22,385 million compared to Rs. 14,783 million, highlighting sustained demand visibility across the business cycle.

A major driver of this growth was exports, which accounted for 79% of Q4 FY’26 inflows and 80% of total FY’26 inflows, underscoring the company’s increasing exposure to global demand, particularly in power-intensive infrastructure segments. 

The company’s order book stood at Rs. 19,729 million as of 31st March 2026, reflecting a well-diversified business mix with a strong export focus. Exports, including deemed exports, contributed the largest share at 64.3 percent (Rs. 12,686 million), highlighting robust global demand across key segments.

Domestic orders accounted for 20.7 percent (Rs. 4,086 million) of the total order book, while Domestic Railways (E-Locomotive) contributed 10.1 percent (Rs. 1,984 million). The remaining share came from Railways exports, spares & aftermarket, and Turkey operations, providing additional diversification across geographies and end markets.

Strong Business Outlook

TDPS continues to witness strong demand across all verticals of its generator business, with order bookings remaining robust and the pipeline staying highly buoyant. Over the past two quarters, the company has maintained order inflows exceeding Rs. 600 crore, with the average now approaching nearly Rs. 650 crore per quarter.

With inflows rising steadily, the focus has now shifted towards execution capabilities. The company believes it is well-positioned to scale deliveries closer to the current order inflow run rate, supporting sustained revenue visibility in the coming quarters.

Capacity Planning

The outlook for both FY27 and FY28 remains strong, prompting the company to evaluate fresh capacity investments to meet the growing demand for regular generators. TDPS is also planning a major push into the larger generator market, which will require significant additions in manufacturing and machining capabilities for large components.

Management indicated that key capacity expansion decisions are expected to be finalised over the next three months, positioning the company to capitalise on the rising global demand environment.

Financials & Others

Its revenue from operations increased by 69.25 percent YoY from Rs. 348 Crores in Q4FY25 to Rs. 589 Crores in Q4FY26, and it also rose by 32.96 percent QoQ from Rs. 443 Crores in Q3FY26 to Rs. 589 Crores in Q4FY26.

Its net profit increased by 35.85 percent YoY from Rs. 53 Crores in Q4FY25 to Rs. 72 Crores in Q4FY26, and it also grew by 28.57 percent QoQ from Rs. 56 Crores in Q3FY26 to Rs. 72 Crores in Q4FY26. The earnings per share (EPS) for the quarterly period stood at Rs. 4.62, compared to Rs. 3.39 in the previous year’s quarter.

Along with this, the company has also approved a 1:2 stock split along with a dividend of Rs. 1.10 per share, compared to Rs. 0.65 announced previously. The move reflects management’s confidence in the company’s growth outlook while also improving stock affordability and enhancing shareholder returns.

The company continues to maintain strong financial efficiency, with a Return on Capital Employed (ROCE) of 33.4 percent and Return on Equity (ROE) of 24.7 percent, reflecting healthy profitability and efficient capital allocation.

Its balance sheet also remains robust with a debt-to-equity ratio of just 0.02, indicating minimal leverage and strong financial stability. Over the last five years, the company has delivered an impressive profit growth CAGR of 43.4 percent, highlighting consistent earnings expansion and operational strength.

Conclusion 

The data centres are a major growth catalyst for TD Power Systems Ltd, especially through rising export demand. With ~80% of FY26 order inflows coming from overseas, the company is clearly benefiting from global infrastructure spending rather than domestic demand.

A large part of this export growth is linked to gas engine and gas turbine generator orders, which are increasingly driven by US data centre expansion and AI-led power requirements. These projects need reliable, high-capacity backup power, which directly supports TDPS order inflows and OEM partnerships.

However, it is not accurate to say data centres are the entire growth engine. Alongside them, industrial, oil & gas, and distributed power demand across multiple regions is also contributing. So, data centres are a strong and fast-growing driver, but part of a broader export-led growth story, not the only one.

That said, the bigger structural trend is clearly shifting in favour of data centres, especially with AI-led infrastructure expansion globally. As power demand from digital infrastructure keeps rising, data centres are likely to become an even more important and sustained growth driver going forward, potentially shaping a larger share of the company’s future order inflows.

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