Detailed Narrative
Strong FY26 Performance Driven by Capacity Expansion
Supreme Power reported a robust FY26, with total income growing 21.78% year-over-year to INR182.1 crores and Profit After Tax (PAT) increasing 9.89% to INR20.44 crores. This performance was significantly boosted by the commencement of commercial production at its new state-of-the-art manufacturing facility in Kannur, Chennai, which expanded the company's annual manufacturing capacity from 2,500 MVA to an impressive 9,000 MVA. The new facility is expected to unlock an estimated revenue potential of INR500-550 crores at optimal utilization.
Robust Order Book and Future Revenue Visibility
As of May 27, 2026, the company's total order book stood at a strong INR588.17 crores, providing significant revenue visibility for the coming quarters. This includes INR264.27 crores from Karnataka-based EPC players, INR159.94 crores from Tamil Nadu Power Distribution Corporation, and INR57 crores from Kerala State Electricity Board. Management guided for INR275-300 crores in revenue for FY27, with an additional INR100 crores expected in FY28, indicating a steady conversion of the order book.
Strategic Focus on Higher Voltage Transformers and Margin Management
The new facility enables the manufacturing of larger transformers up to 200 MVA and 220 kV voltage class, strengthening the company's participation in utility, transmission, industrial, and data center projects. While industry-wide input cost inflation led to a 1-1.5% dip in PAT margin in FY26, the company is mitigating this through an improved high-voltage product mix and proactive sourcing strategies, aiming to maintain PAT margins in the 10-12% range and operating margins at 15-16%.
Working Capital Efficiency and Capacity Ramp-up
Supreme Power demonstrated improved working capital efficiency, with receivable days sharply reducing to 94 days, reflecting strong collection discipline. The ramp-up of the new 9,000 MVA facility is underway, with management expecting to reach optimal utilization of almost 90% within 2 to 3 years. Initial output from the newly deployed 150-200 personnel is expected to stabilize within 3-4 months, contributing INR20-25 crores to FY26 revenue from the new facility.
Planned Capex for Backward Integration and Certification
The company plans a capital expenditure of INR20-25 crores for a new tank manufacturing factory, expected to be completed in FY27. This backward integration is anticipated to improve margins by 5-8% of turnover and strengthen the supply chain. Additionally, the company is undertaking a prototype test for a 160 MVA 220 kV transformer, costing INR14-16 crores, which is crucial for certification and securing larger, higher-value orders in the future, with testing scheduled for December 2026/January 2027.
Strong Market Demand and Future Growth Drivers
Management highlighted a "very huge" demand for transformers, driven by rapid industrialization, infrastructure development, rising commercial consumption, and accelerated investments in renewable energy, AI-driven data centers, and grid modernization projects. The Central Electricity Authority's aggressive plans for grid expansion further strengthen the sector outlook, positioning Supreme Power favorably for sustained growth over the next 5 years, particularly for larger power transformers.