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Transformer production in India has more than Considering the above drivers, we estimate the
doubled in the last 5 years (FY04-FY09). The transformer market in India to be INR 143.7 bn
production capacity has grown at a much faster annually during FY08-12 and INR 161.2 bn
rate (CAGR of 17.7% from FY00 to FY03 as during FY13-FY17 annually
against CAGR of 10.5% from FY04 to FY09) after
radical regulatory changes were implemented There is a clear trend among large established
in the power sector players to focus on enhancing their
manufacturing capability to be able to
Four key drivers of the transformer industry in manufacture EHV and UHV range of
India are: transformers. Focus of established players is
also shifting towards high margin specialized
Addition to generation capacity fuelling transformers such as dry type transformers and
transformation requirement - 186 GW of transformers based on newer technologies
power generation capacity is to be added over
10 years from FY07 to FY17. Addition in Key challenges faced by the industry include
generation capacity would also require a susceptibility to raw material prices such as
proportional increase in overall copper and CRGO, managing long working
transformational capacity in the country capital cycles, dependence on government
spending in the power sector
Development of the transmission network in
India - The national grid which forms the While the market is available to be tapped for
transmission backbone in the country would be Indian players, technical capabilities and ability
upgraded to 2.3 times of its capacity at the end to manage sourcing and working capital cycle
of Xth five year plan. The upgrading of the could prove to be key differentiators
national grid is focused on increasing UHV and
EHV ranges of transmission lines Exhibit 1: Indian Transformer Market
Focus on rural electrification and distribution -
Avg. annual market Avg. annual market
The Government of India has undertaken key Market driver
size (FY08-FY12) (FY13-FY17)
initiatives such as RGGVY and R-APDRP which Addition to power
14.1 19.4
aim at upgrading sub transmission and generation capacity
Development of
distribution network, electrifying all un- 37.8 45.4
transmission network
electrified villages and habitations, providing Distribution and rural
85.9 103.1
access to electricity to all rural households, electrification
Exports driven by
establishing base-line data and reducing AT&C 47.0 71.9
global demand
losses through modernization and renovation of Imports 41.2 78.5
the distribution network in the country
Total 143.7 161.2
Growing exports driven by demand in global Source: o3 Capital Analysis
markets - Indian exports of transformers have
more than tripled since FY05. However, lack of This report by o3 Capital captures the past
technical capabilities in the domestic market performance, the future potential and key
has also driven imports. In the short term, we drivers of the transformer segment in India
expect India to be a net importer of
transformers, though there exists significant For a detailed report, please mail to
export opportunities for Indian companies to

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