A report by Motilal Oswal Financial Services said India's transmission and distribution (T&D) sector is poised for a sustained growth cycle, supported by an estimated capital expenditure of Rs nine trillion (tn) through 2032. The broker said the T&D capex cycle that began in FY22-23 has already driven sharp growth in order books, revenue and margin profiles for industry participants. It noted that the National Electricity Plan outlines an ambitious investment plan of around Rs nine tn in transmission to integrate large-scale renewable energy. The report highlighted a near-term slowdown in ordering, with sector-level awards falling to 16 schemes in FY26 from 45 in FY25, and attributed this mainly to temporary bandwidth constraints rather than any structural demand weakness. It said domestic manufacturers are operating at high capacity utilisation and are increasingly concentrating on higher-voltage transformers, which involve longer manufacturing cycles and testing timelines and extend lead times. These capacity and lead time dynamics have affected short-term ordering without altering the broader demand case. On demand trends the brokerage observed robust demand from both domestic and export markets while transformer supply has struggled to keep pace, resulting in longer lead times and firmer pricing. It reported that transformer demand in the US and Europe is rising sharply because of renewable energy integration, data centre expansion, industrial electrification and electric vehicle charging infrastructure, as well as the need to replace ageing assets. This global demand-supply mismatch and higher prices have increased reliance on imports and created an opening for Indian manufacturers. The report also pointed to emerging opportunities in high-voltage direct current (HVDC) projects, noting a 32.3 gigawatt (GW) pipeline with about 14.5 GW already tendered and awarded and an expectation of one to two HVDC awards annually. It said transformer companies are expected to deliver strong earnings over FY25-28, but cautioned that valuations are no longer cheap while adding that the possibility of further earnings upgrades and unfolding export opportunities could sustain investor interest. Overall it concluded that capacity expansions and export demand support continuation of the cyclical upturn.