₹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.
The business
Supreme Power Equipment manufactures power transformers (up to 160 MVA), distribution transformers, and inverter duty transformers for solar/wind. 30 years expertise, CPRI type tested. Clients: Siemens, L&T, Suzlon, NLC India. New 140,000 sq ft facility takes capacity from 2,500 to 9,000 MVA.
Why this business matters
Transformer demand visible for 8-10 years — India's renewable integration, RDSS ₹3.03 lakh Cr, and electrification. Competitors' books full 12-18 months
Order book 6.3x surge in 15 months — from ₹91.5 Cr to ₹577.7 Cr. Includes NLC India ₹60.9 Cr and first 160 MVA order (₹23.3 Cr)
8x capacity expansion — ₹700 Cr revenue potential — 140,000 sq ft plant enables 160 MVA transformers. Capacity from ₹110 Cr to ₹700 Cr combined
The moat
Reality check
Execution risk on new plant — skilled labor at 30% deployment. 160 MVA manufacturing is fundamentally different from 25 MVA. First-time quality is critical
CRGO steel and copper volatility — core materials with periodic supply constraints. Copper pass-through only on 20%
Geographic concentration in Tamil Nadu — 4 states served but TN dominates. National expansion aspirational
Potential equity dilution — ₹21 Cr preferential allotment proposed. Capex overrun from ₹75 Cr to ₹100 Cr
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
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.
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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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