India power demand hit a record 250 gigawatts (GW) in FY25, rising from 148 GW in 2014–a 68% increase in just over a decade. This growth is driven by rising industrial expansion, agricultural development, increasing access to electricity, and greater use of air conditioners.
According to the Global Electricity Outlook (2025) by the International Energy Agency (IEA), air conditioners accounted for about 60 GW of the total peak load in 2024 and are expected to contribute one-third, reaching 140 GW.
It added that energy demand from ACs will triple by 2050, equivalent to 10 new air conditioners every second for 30 years. In addition, rising demand from data centers and the growing adoption of artificial intelligence are also expected to add significantly to power consumption.
The IEA estimates that India’s electricity demand will grow at an average annual rate of 6.3% over the next 3 years, compared to a 5% growth between 2015 and 2024. Meanwhile, the National Electricity Plan forecasts that India’s peak demand could rise by 55% from current levels, reaching 388 GW by 2032.
Against this backdrop, two stocks are expected to benefit from the growing demand, and their positioning may offer potential long-term tailwinds. Let’s take a look.
#1 TD Power Systems
TD Power is a leading manufacturer of up to 200 MW AC generators. As of Q3FY2025, it had supplied over 6,907 generators since its inception. It supplies generators to 110 countries worldwide, with a major presence in Europe and North America.
The company manufactures steam, hydro, diesel, and gas generators for engines, turbines, and special applications. It serves diverse industries, including cement, sugar, data centres, oil and gas, metals and mining, and power generation (both conventional and renewable).
Revenue from generator manufacturing comes from selling turbines and engines to original equipment manufacturers (OEMs). It has well-diversified OEM customers, including Siemens, Voith Hydro, Ineo, & Triveni Turbines. The top 10 customers account for 70-75% of gross revenue.
Over the past few years, the group has diversified its geographical presence to offset any slowdown in domestic demand. This is evident from the growing revenue from the overseas market, which has grown from 40-50% about 4 years ago to 65% in 9MFY25.
On the financial front, revenue grew 26% to ₹9.4 billion in 9MFY25 compared to the previous year. This growth was driven by strong demand in gas engines, turbines, and other segments such as steam, hydro, and diesel. It is on track to post full-year revenue of about ₹12.8 billion.
Margins have also expanded 40 basis points to 17.8%. Notably, the company’s margins have improved from 12.5% in F22 to the current level. Net profit rose 37% to ₹1.2 billion, driven by economies of scale and cost optimization measures.
Looking ahead, TD Power’s order book stood at ₹13 billion, with ₹10.6 billion inflow in 9MFY25 (up 40% from last year). The order book is pretty diversified, with 48.6% from overseas customers, 25.5% from railways, and 24.7% from the domestic market.
The order book for the railway segment will be executed over the next 3 years; the remaining in 3-9 months. The order book offers revenue visibility for the next 1 year, with a book-to-bill ratio of 1.3 times, per FY24 revenue of ₹10 billion.
The company forecasts revenue of ₹15 billion in FY26, an increase of about 20% from the expected revenue of ₹12.8 billion in FY25. The company estimates the order inflows in the fourth quarter will be above the average required to meet guidance.
Exports remain a key driver for the company. This is driven by the energy transition towards more renewable and gas-fired power plants, oil and gas, grid stabilisation units, hydro, large data centres, waste heat recovery plants, and railway orders from Germany and the US.
The company is also expanding to meet rising demand. It is setting up a new facility to manufacture generators, motors, sub-assemblies, and parts, with a total capex of about ₹1.4 billion. The capex is entirely funded from internal accruals and will go live in FY26.
TD Power’s share price has undergone a major rerating, delivering a return of about 23x over the last 5 years. It trades at a price-to-equity multiple of 42x, a 30% premium at the 10-year median multiple of 30x.
TD Power Share Price
According to the National Electricity Plan, India will need 997 GW of power generation capacity to meet the peak power demand of 388 GW. To meet this growing demand, the Indian government plans to invest ₹4.9 lakh crore between FY27 and FY32. TD Power will continue to benefit from tailwinds as a major player in this sector.
#2 Power Grid
Power Grid is a Maharatna Central Public Sector Undertaking and the largest power transmission company in India. As of Q3FY25, it operates 1,79,594 circuit kilometres of transmission lines and 280 substations, with a total transformation capacity of 5,52,961 mega volt-amperes.
It manages about 84% of the country’s inter-regional transmission capacity. The company said system availability stood at 99.81%, indicating a highly reliable network.
Power Grid’s revenue model provides strong visibility, with nearly 95% of income coming from long-term transmission service agreements. Tariffs are regulated by the Central Electricity Regulatory Commission, offering predictable cash flows.
In terms of financials, revenue and net profit remained stable at ₹34,869 crore and ₹11,379 crore in 9MFY25. Revenue remained flat due to a 2% year-on-year decline in transmission charges.
Looking ahead, the company has orders worth of ₹1.4 lakh crore as of December 2024. This includes is a mix of regulated tariff mechanism and competitive bidding projects. The order book gives earnings visibility for upto 3 years, with a book-to-bill ratio of over 3x (at FY24 revenue of ₹458 billion).
Power Grid expects to win more projects worth ₹ 1.9 lakh crore by FY32 in addition to the existing orderbook. It has outlined a strong capex pipeline of ₹2 trillion
under transmission segment. Annual guidance includes capex of ₹230 billion in FY25, ₹250-300 billion in FY26, and ₹400 billion in FY27.
A growing share of renewable energy in India’s power mix is also expected to drive further demand for transmission infrastructure upgrades.
The company believes that India’s renewable energy capacity of 500 GW by 2030 will also be the driving force for growth. Also, higher transmission capacity will be required for green hydrogen, battery energy storage systems and pumped hydro projects.
Motilal Oswal estimates, this has opened up a multi-decade investment opportunity, with a capex of ₹40 trillion estimated over the next decade. Rising power demand, the shift toward renewable energy, and the modernization of power infrastructure are expected to drive growth.
From a valuation perspective, the company trades at a price-to-equity multiple of 18x, which is higher than the 10-year average multiple of 14x. While not undervalued, the company provides a long-term visibility, supported by policy support, and infrastructure need. The company also offers a dividend yield of about 4%.
Power Grid Share Price
Conclusion
India’s power demand is set to rise steadily, driven by AC adoption, data centres, and industrial growth. This creates long-term opportunities for players like TD Power and Power Grid. TD Power offers strong growth potential with rising exports and order book, but valuations are steep after a 23x rally. Power Grid, on the other hand, offers steady returns, policy tailwinds, and visibility backed by long-term contracts. Both have room to benefit—your choice depends on whether you prioritise growth or stability.
Disclaimer
Note: Throughout this article, we have relied on data from and the company’s investor presentation. Only in cases where the data was not available have we used an alternate but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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