Deep Dives/Transformers/Supreme Power Equipment Ltd

Deep Dive

₹578 Cr order book, 20% EBITDA margins — this transformer maker is scaling 8x

Chennai's 30-year transformer specialist is building an 8x larger facility for 160 MVA power transformers. Order book surged 6.3x in 15 months.

KnowYourSME Research

May 2026 · 9 min read

₹578 Cr

Order Book

₹149 Cr

Revenue FY25

19.4%

EBITDA Margin

0.20x

D/E Ratio

1Executive Summary & Investment Thesis

Supreme Power Equipment is a Chennai-based transformer manufacturer experiencing a once-in-a-decade capacity expansion. Founded in 1994 by Vee Rajmohan, the company has 30 years of expertise in power transformers (up to 25 MVA/110 KV, CPRI type tested), distribution transformers, and specialty transformers for renewable energy. Revenue: ₹99.8 Cr (FY23) → ₹148.7 Cr (FY25) with industry-leading EBITDA margins of 18-20%. The new 140,000 sq ft facility (8x existing) takes capacity from 2,500 to 9,000 MVA, enabling 160 MVA transformers. Order book surged 6.3x from ₹91.5 Cr to ₹577.7 Cr in 15 months. D/E 0.20x, OCF ₹39.4 Cr. Revenue potential ₹600-700 Cr at full utilization.

8/10

Capacity Inflection — Best-in-Class Margins Meet 6x Order Book Growth

One of the most compelling SME stories. 18-20% EBITDA, 6.3x order book surge, 8x capacity expansion, clean balance sheet. Key risk is 160 MVA execution at scale. If management delivers 60-70% of capacity potential, revenue crosses ₹300 Cr by FY27.

Bull Case

+Order book 6.3x surge to ₹577.7 Cr — includes NLC India ₹60.9 Cr and first 160 MVA order
+8x capacity expansion: 2,500 to 9,000 MVA. Revenue potential ₹600-700 Cr combined
+Industry-leading EBITDA 18-20%, PAT 11-12%. Larger transformers carry 1-2% higher margins
+Clean balance sheet: D/E 0.20x, OCF ₹39.4 Cr, CRISIL BBB-/Stable
+Structural demand for 8-10 years. Competitors' books full 12-18 months creates overflow
+Revenue mix 76% private. IDT (solar) rose from 7% to 18%. 40% of order book solar-linked

Bear Case

−Execution risk — skilled labor at 30%. 160 MVA fundamentally different from 25 MVA
−Geographic concentration — TN dominates. 4 states served, national expansion aspirational
−Revenue guidance conservative — FY26 at ₹180-200 Cr despite ₹577 Cr backlog
−CRGO and copper volatility — no hedging. Copper pass-through only on 20%
−Potential dilution — ₹21 Cr warrants + possible further dilution in FY27
−Working capital scaling needed for ₹300+ Cr revenue

2Business & Management Architecture

The Journey

Supreme Power Equipment began as a partnership firm in 1994, founded by Vee Rajmohan in Chennai. Three decades of transformer manufacturing — from distribution to power transformers with CPRI type testing up to 25 MVA/110 KV. Incorporated 2005, converted to public company 2023. IPO on NSE Emerge Dec 2023 raised ₹46.7 Cr. Now building a 140,000 sq ft facility (8x the existing 17,876 sq ft plant) with 9,000 MVA capacity enabling up to 160 MVA transformers — moving from the crowded sub-25 MVA market into premium territory. The order book validated the bet: ₹91.5 Cr → ₹577.7 Cr in 15 months, including landmark NLC India ₹60.9 Cr and first 160 MVA order. Expanded from Tamil Nadu to 4 states. Revenue mix shifted from govt-heavy to 76% private. Solar IDTs grew from 7% to 18% of revenue.

Revenue Segments

~45%

Power Transformers

Up to 160 MVA/220 KV (new plant). CPRI type tested. Higher margins at larger ratings.

~25%

Distribution Transformers

16 KVA to 3,500 KVA. Volume segment for SEBs and industrial.

~18%

Inverter Duty Transformers

Solar/wind energy. Fastest growing — up from 7%. 40% of order book.

~12%

Specialty Transformers

Windmill, generator, isolation, converter & rectifier.

Key Management

Vee Rajmohan · Chairman & MD

Founder since 1994. 30 years transformer expertise. Articulate concall speaker. Drives strategy and client relationships.

K V Pradeep Kumar · Whole-Time Director

Co-promoter. Operations and manufacturing leadership.

Thulasiraman Boologa Nathan · CFO

Professional CFO. Finance, banking, and working capital.

New Independent Director · Independent Director

ABB/Hitachi/TELK experience. Guiding 160 MVA manufacturing and PGCIL registration.

Promoter

~60%

Public

~40%

Management flags: Two-promoter company with Rajmohan dominant. 30 years transformer expertise. 100% fresh issue IPO (promoters didn't sell). New independent director with ABB/Hitachi background. Danya Electric (90%-owned subsidiary) handles utility contracts. Conservative revenue guidance — under-promises consistently.

3Industry & Market Dynamics

Industry Overview

India's transformer market growing 12-15% CAGR. Demand from renewable energy (500 GW target), RDSS (₹3.03 lakh Cr), smart grids, data centres. Critical supply deficit — established players' books full 12-18 months. CRGO steel and copper are volatile key inputs. Demand visibility 8-10 years per management.

Competitive Landscape

Tiered market: Tier 1 (CG Power, Voltamp, ABB — 100-500+ MVA, books full). Tier 2 (Dynamic Industries, Sanergrid — 25-100 MVA). Tier 3 (SME/regional). SPEL moving Tier 3 → Tier 2 with 160 MVA. EBITDA margins 18-20% vs industry 12-15% — best-in-class. 30 years expertise + blue-chip clients differentiate.

Peer Context

Listed peers: Voltamp Transformers (large-cap, 100+ MVA), CG Power (large-cap), Dynamic Industries, T&R. SPEL's 18-20% EBITDA is best-in-class (peers 12-15%). ₹577 Cr order book at SME scale is exceptional. With 160 MVA capability, SPEL bridges SME and mid-cap transformer manufacturing.

4IPO & Capital Structure

IPO Details

Issue Size

₹46.7 Cr (71.8 lakh shares at ₹65 — 100% fresh issue)

Price Band

₹61-65 per share

Platform

NSE Emerge (SME)

Listing Date

December 29, 2023

Subscription

IPO oversubscribed

Objects of Issue

1.Working capital requirements

2.General corporate purposes

Capital Structure

Post-IPO net worth ₹96.2 Cr. D/E 0.20x. Borrowings ₹18.7 Cr. Capex ₹95-100 Cr funded via IPO + ₹35 Cr term loan + internal accruals. ₹21 Cr preferential allotment proposed. CRISIL BBB-/Stable.

IPO Promise Tracker

Has management delivered on IPO promises?

Not Started

Fund working capital

Receivable days improved from 190 to 80-90 days.

Not Started

Expand manufacturing capacity

140,000 sq ft facility built. 2,500 → 9,000 MVA. Trial production commenced.

Not Started

Move into higher-MVA transformers

160 MVA/220 KV built. First ₹23.3 Cr order won Apr 2026.

Not Started

Geographic expansion

4 states: TN, KL (KSEB), KA (KPTCL), TS.

Not Started

Grow renewable energy segment

IDT 7% → 18%. 40% of order book solar-linked. NLC ₹60.9 Cr.

Not Started

PGCIL vendor registration

New board member guiding process.

5Operational Performance & Growth

Operations & Capacity

Two facilities: 1. Existing — SIDCO, Chennai (~17,876 sq ft): 2,500 MVA. Up to 25 MVA. Revenue potential ₹100-110 Cr. 17,000+ units manufactured. 2. New — 6-acre, Chennai (~140,000 sq ft): 6,500 MVA additional (total 9,000 MVA). Up to 160 MVA/220 KV (Phase 1), 315 MVA (Phase 2). Capex ₹95-100 Cr. 95% complete Jan 2026. Trial production Q4 FY26. Combined ₹600-700 Cr revenue potential. NABL-grade testing lab. No-credit dispatch policy.

Order Book & Pipeline

Trajectory: ₹91.5 Cr (Jan 25) → ₹167.7 Cr (Jun 25) → ₹198.1 Cr (Aug 25) → ₹235 Cr (Nov 25) → ₹311.1 Cr (Feb 26) → ₹577.7 Cr (Apr 26). 6.3x in 15 months. Key: NLC India ₹60.9 Cr, ₹74.6 Cr Hyderabad (first 160 MVA), ₹28.5 Cr Karnataka EPC. Mix: ~37% govt, ~63% private. Bid pipeline ₹700-800 Cr.

Key Milestones

1994

Founded as partnership firm by Vee Rajmohan in Chennai

2005

Incorporated as Supreme Power Equipment Pvt Ltd

2023-12

IPO on NSE Emerge at ₹65/share. Raised ₹46.7 Cr

2025-03

FY25 revenue ₹148.7 Cr. New plant 70% complete. Order book ₹167.7 Cr

2025-07

NLC India ₹60.9 Cr order (Navratna CPSE). KPTCL vendor approval

2025-11

Order book ₹235 Cr. 4 states. Steel sector entry

2026-01

New plant 95% complete. Trial production. Order book ₹311 Cr

2026-04

₹128 Cr Hyderabad orders. First 160 MVA. Order book ₹577.7 Cr

2026-05

₹28.5 Cr Karnataka EPC order

FY27

Revenue target ₹300+ Cr. Full new plant ramp-up

FY28

Revenue target ₹400-500 Cr. Phase 2 (315 MVA) evaluation

Management Commentary

“Transformer demand will sustain for at least 8 to 10 years... competitors' books full 12-18 months”

Unprecedented structural demand. Overflow from large players benefits SPEL.

H1 FY26 Concall, Nov 2025 — Vee Rajmohan

“Our EBITDA of 18-20% is sustainable... larger power transformers carry 1-2% higher margins”

Margin expansion potential with product mix shift.

Q1 FY26 Concall, Aug 2025 — Vee Rajmohan

“New plant ₹600-650 Cr + existing ₹100-110 Cr = ₹700 Cr revenue potential”

Combined capacity math at full utilization.

Q3 FY26 Concall, Feb 2026 — Vee Rajmohan

“No-credit dispatch — products held at factory until payment received”

Conservative working capital policy. ₹7-8 Cr finished goods held awaiting payments.

Q3 FY25 Concall, Jan 2025 — Vee Rajmohan

“Receivable days improved from 190 to 80-90... government now pays within 60 days”

Dramatic working capital improvement.

Q3 FY26 Concall, Feb 2026 — Vee Rajmohan

“We expect FY26 ₹180-200 Cr, FY27 ₹300+ Cr, FY28 ₹400-500 Cr”

Stepped guidance. Conservative — ₹577 Cr backlog covers 2+ years.

Q3 FY26 Concall, Feb 2026 — Vee Rajmohan

“IDT contribution rose from 7% to 18%... 40% of order book is solar-linked”

Riding India's solar boom. NLC ₹60.9 Cr is for solar IDTs.

H2 FY25 Concall, Jun 2025 — Vee Rajmohan

“The 160 MVA order is validation — first time we are manufacturing at this scale”

₹23.3 Cr order validates new plant capability.

BSE General Update, Apr 2026

6Financial Health Deep-Dive

P&L Snapshot

Metric	FY23	FY24	FY25	9M FY26
Revenue	₹99.8 Cr	₹113.5 Cr	₹148.7 Cr	₹111.4 Cr
EBITDA	₹18.3 Cr	₹23.3 Cr	₹29.1 Cr	₹19.6 Cr
EBITDA Margin	18.3%	20.5%	19.4%	17.6%
PAT	₹11.1 Cr	₹14.3 Cr	₹18.9 Cr	₹12.8 Cr
PAT Margin	11.1%	12.6%	12.4%	11.5%
D/E Ratio	1.11x	0.12x	0.20x	—
OCF	₹5.3 Cr	(₹10.7 Cr)	₹39.4 Cr	—
Order Book	—	₹51.4 Cr	₹167.7 Cr	₹311.1 Cr

Financial Commentary

Exceptional SME profile: consistent 18-20% EBITDA (best-in-class for transformers), 11-12% PAT, clean D/E 0.20x. FY25 OCF of ₹39.4 Cr while investing ₹40.6 Cr in new facility — self-funding growth. Revenue growth steady at 14-31% constrained by capacity. 9M FY26 slight margin compression (17.6%) from product mix and new plant overheads. Order book at ₹577.7 Cr provides 2+ years visibility. No-credit dispatch and improving receivable days drive cash conversion.

💰

Cash Flow vs PAT

FY25: OCF ₹39.4 Cr vs PAT ₹18.9 Cr — OCF at 2.1x PAT is outstanding. Self-funding ₹95-100 Cr capex. FY24 OCF was negative (₹10.7 Cr) due to IPO year working capital build-up. Receivable days improved from 190 to 80-90 — a 50%+ improvement. No-credit dispatch policy protects cash conversion.

⚠️

Balance Sheet Flags

STRENGTHS: D/E 0.20x, OCF ₹39.4 Cr, CRISIL BBB-/Stable, net worth ₹96.2 Cr, fixed assets ₹64 Cr (from ₹4.6 Cr). MONITOR: Working capital for ₹300+ Cr revenue, ₹21 Cr dilution, capex overrun ₹75→₹100 Cr, current ratio 2.33x→1.70x.

Period-wise Analysis

FY23

₹99.8 Cr

Revenue

18.3%

EBITDA Margin

11.1%

PAT Margin

Pre-IPO year. Strong margins on existing capacity. 30-year legacy.

Key Developments

→First year approaching ₹100 Cr

→EBITDA 18.3% — industry-leading

→Capacity utilization ~38%

FY24Order Book: ₹51.4 Cr

₹113.5 Cr

Revenue

20.5%

EBITDA Margin

12.6%

PAT Margin

IPO year. Peak 20.5% margins. D/E from 1.11x to 0.12x. New plant construction began.

Key Developments

→IPO Dec 2023 raised ₹46.7 Cr

→Revenue +14%

→Peak EBITDA 20.5%

→New plant construction started

FY25Order Book: ₹167.7 Cr

₹148.7 Cr

Revenue

19.4%

EBITDA Margin

12.4%

PAT Margin

Strong growth. Revenue +31%. Order book 3.3x. OCF ₹39.4 Cr. Plant 70% complete. IDT 7→18%.

Key Developments

→Revenue +31% to ₹148.7 Cr

→OCF ₹39.4 Cr — exceptional

→KSEB vendor approval

→Revenue mix 76% private

→CRISIL BBB-/Stable

Q1 FY26Order Book: ₹198.1 Cr

₹35.2 Cr

Revenue

19.1%

EBITDA Margin

12.7%

PAT Margin

NLC India ₹60.9 Cr order. KPTCL vendor approval. Plant 90%+ complete.

Key Developments

→NLC India ₹60.9 Cr — largest order ever

→Karnataka entry via KPTCL

→Revenue +28% YoY

H1 FY26Order Book: ₹235 Cr

₹75.4 Cr

Revenue

18.9%

EBITDA Margin

12.5%

PAT Margin

14 orders worth ₹175.6 Cr. Telangana entry. Steel sector entry.

Key Developments

→H1 revenue +29% YoY

→₹175.6 Cr orders in H1

→4th state Telangana

→MSME Ratna 2025

9M FY26Order Book: ₹311.1 Cr

₹111.4 Cr

Revenue

17.6%

EBITDA Margin

11.5%

PAT Margin

Q3 margin dip from copper costs and deferred billing. Plant 95% complete. Trial production.

Key Developments

→Order book ₹311 Cr — 3.4x YoY

→Plant 95% complete

→Trial production commenced

→Bid pipeline ₹700-800 Cr

Q4 FY26 (Update)Order Book: ₹577.7 Cr

—

Revenue

—

EBITDA Margin

—

PAT Margin

₹128 Cr Hyderabad orders. First 160 MVA. Order book nearly doubled from Q3. Commercial production commenced.

Key Developments

→₹128 Cr from Hyderabad (Apr 2026)

→First 160 MVA order ₹23.3 Cr

→₹28.5 Cr Karnataka order (May 2026)

→Order book ₹577.7 Cr

→New plant commercial production

7Governance, Risks & Monitoring Checklist

Governance & Compliance

30-year-old business. 100% fresh issue IPO (promoters didn't sell). New independent director from ABB/Hitachi/TELK. MSME Ratna Award recipient. Regular quarterly concalls. Danya Electric (90%-owned subsidiary) is primary related party. Conservative governance for SME scale.

Key Risks

HighNew plant execution and ramp-up

Skilled labor at 30%. 160 MVA technically complex. First-time quality critical for reputation.

HighCRGO steel and copper volatility

Core materials. Periodic supply constraints. Copper pass-through only 20%. No hedging.

Medium-HighGeographic concentration

TN dominates. 4 states served. National expansion nascent.

MediumCapex cost overrun

₹75 Cr → ₹100 Cr — 30% increase. More overruns possible during commissioning.

MediumEquity dilution

₹21 Cr warrants. Possible further dilution FY27. Promoter holding will reduce.

MediumWorking capital scaling

₹300+ Cr revenue needs higher bank limits. Govt cycles can stretch.

MediumOrder concentration

NLC ₹60.9 Cr (10.5%), Hyderabad ₹128 Cr (22%). Large order slippage would impact.

Low-MediumCompetition from larger players

At 160 MVA, entering Voltamp/CG Power territory. They have deeper resources.

🚪

Exit Trigger

Exit if new plant revenue doesn't reach ₹50 Cr by FY27 Q2, if EBITDA margins fall below 15%, or if order book drops below ₹400 Cr

Quarterly Monitoring Checklist

Check these items every quarter to track this stock

New plant commercial revenue from Q4 FY26

Skilled workforce ramp-up — needs 70-80% by FY27

Order book sustaining above ₹500 Cr

EBITDA margins holding 18-20% through ramp-up

First 160 MVA delivery and acceptance

PGCIL vendor registration progress

Geographic revenue diversification (KA, KL, TS share)

CRGO steel availability and pricing

Receivable days sustaining 80-90

FY27 revenue ₹300+ Cr target

Export order wins

Preferential allotment and dilution impact

Sources

1. Red Herring Prospectus (RHP) — Supreme Power Equipment Limited (Dec 2023)

2. Annual Report FY 2023-24

3. Annual Report FY 2024-25

4. Investor Presentation — Q3 & 9M FY25 (Jan 2025)

5. Investor Presentation — H2 FY25 (May 2025)

6. Investor Presentation — Q1 FY26 (Aug 2025)

7. Investor Presentation — H1 FY26 (Nov 2025)

8. Investor Presentation — Q3 FY26 (Feb 2026)

9. Concall Transcript — Q3 FY25 (Jan 2025)

10. Concall Transcript — H2 FY25 (Jun 2025)

11. Concall Transcript — Q1 FY26 (Aug 2025)

12. Concall Transcript — H1 FY26 (Nov 2025)

13. Concall Transcript — Q3 FY26 (Feb 2026)

14. BSE Notification — Order ₹74.6 Cr Hyderabad (Apr 22, 2026)

15. BSE Notification — General Update ₹128 Cr + Order Book ₹577.7 Cr (Apr 24, 2026)

16. BSE Notification — Order ₹28.5 Cr Karnataka (May 4, 2026)

The Verdict

One of the most compelling SME stories in power equipment. 18-20% EBITDA margins (best-in-class), 6.3x order book surge, transformative 8x capacity expansion, and clean 0.20x D/E balance sheet. Key risk is 160 MVA execution at scale.

Watch For

New plant commercial revenue (Q4 FY26+), 160 MVA transformer delivery, skilled workforce ramp-up, PGCIL registration, EBITDA margins holding through ramp-up.

₹578 Cr order book with 20% EBITDA and an 8x capacity expansion — the next mid-cap transformer story or an execution bet too far?

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Disclaimer: For educational purposes only. Not SEBI-registered. Author may hold positions in stocks discussed. Not a buy/sell/hold recommendation. Do your own due diligence.

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