Why are FIIs consistently increasing their stake in GE Vernova and Transformers & Rectifiers?

The growing population and rapid industrialization have led to higher energy consumption, necessitating more transformer installations across urban and rural areas. With the Indian transformer market expected to grow at a CAGR of around 5.6 percent to 6.91 percent from 2025 to 2033, depending on the segment, foreign investors are keen to tap into this expanding and promising sector.

Looking ahead, the transformer industry’s outlook remains positive. The power transformer market is anticipated to reach ~$4.2 billion by 2033. Concurrently, the dry-type transformer segment is projected to grow at a CAGR of 6.7 percent from 2025 to 2030, driven by technological advancements and a shift towards energy-efficient solutions.

The global push for renewable energy, coupled with the modernization of power grids, is expected to drive significant growth in the transformer industry.

Following are the two transformer stocks in which FIIs have increased stake in Q3 FY25:

1. Transformers and Rectifiers (India)  Limited

With a market cap of Rs. 11,979.6 crores, the shares of a prominent player in the manufacturing of transformers and reactors in India surged nearly 7 percent to Rs. 416.8 on Wednesday. 

In Q3 FY25, the company’s revenue from operations grew by around 192 percent YoY to Rs. 559 crores, while the net profit grew by nearly 243.8 percent YoY to Rs. 55 crores. FII holdings have increased by 1.74 percent, rising from 9.34 percent in Q2 FY25 to 11.08 percent in Q3 FY25. 

The revenue target for FY25 is set at Rs. 2,000 crores, with the target for FY26 expected to exceed Rs. 3,500 crores. Additionally, the long-term revenue guidance for TRIL is to reach $1 billion in revenue over the next 3-4 financial years. 

This implies a CAGR of nearly 44 percent, driving revenue from Rs. 2,000 crores in FY25 to around Rs. 8,600 crores (or $1 billion) by the end of FY29. Management remains optimistic about growth prospects in the Indian energy sector, especially with significant opportunities in infrastructure development. 

The company plans to adopt a selective approach towards order inflows, prioritizing high-margin and quick-payment projects to improve profitability. TRIL is focused on improving its product mix while maintaining a sustainable margin trajectory, with a target of achieving EBITDA margins of 17 percent or more by FY27. 

Regarding capital expenditure, the company’s ongoing project to expand its capacity by 15,000 MVA is on track and is expected to be operational by February-March 2025, with order bookings anticipated to begin in Q1 FY26. 

Transformers and Rectifiers (India) Limited (TRIL) is engaged in the business of manufacturing power, furnace and rectifier transformers. The company offers a wide range of transformers: power transformers, distribution transformers, furnace transformers, rectifier transformers and shunt reactors, which have applications in the power transmission and distribution sector, and other industrial sectors.

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2. GE Vernova T&D India Limited

With a market cap of Rs. 35,539.3 crores, the shares of a leading player in the power transmission and distribution business surged nearly 4 percent to Rs. 1,415 on Wednesday. 

In Q3 FY25, the company reported good results with revenue from operations increasing by around 28 percent YoY to Rs. 1,074 crores, while the net profit grew by nearly 192 percent YoY to Rs. 143 crores. FII holdings have increased by 5.22 percent, rising from 6.82 percent in Q2 FY25 to 12.04 percent in Q3 FY25. 

The company is actively assessing opportunities for capacity expansion, including potential brownfield projects at its existing facilities. For FY25, the company anticipates a capital expenditure (capex) of approximately Rs. 800 million, with the flexibility for further investments as market conditions evolve. 

It is also actively participating in the STATCOM market, which has an estimated addressable market of Rs. 3,000 to Rs. 3,500 crores. The company remains focused on expanding export opportunities while ensuring a well-balanced order book between domestic and export markets. GE Vernova T&D India Limited, formerly known as GE T&D India Limited, is the listed entity of GE Vernova’s Electrification business in India. 

The company is in the business of building power transmission and distribution infrastructure, with a wide range of transmission equipment up to Extra and ultra-high voltages (765 kV and beyond), including air-insulated switchgear (AIS) and locally manufactured power transformers and gas-insulated switchgear (GIS).

Written by Shivani Singh

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