India's ₹2.4 Lakh Crore Transmission Race: 3 Stocks Poised for Growth

India's Energy Grid Expansion Fuels Infrastructure Stocks

India's power transmission and distribution sector is at the forefront of the nation's energy transition, fueled by a government-backed capital expenditure plan totaling ₹2.4 lakh crore by fiscal year 2030. This initiative is crucial for integrating large-scale renewable energy sources, primarily solar and wind, with the national grid and delivering power to burgeoning demand centers across the country.

Government Push for Renewables

The significant capex allocation aligns with India's ambitious target of achieving 500 gigawatts of renewable energy capacity. The primary objective is to establish robust grid infrastructure capable of transmitting substantial amounts of green energy from resource-rich states to major consumption hubs. This policy support, combined with rising global demand for sustainable energy solutions, creates a favorable environment for companies operating in this space.

Hitachi Energy: The Grid Architect

Hitachi Energy India is a key player, focusing on grid technology, digitization, and integrated systems. The company reported a substantial order book of ₹29,413 crore as of September 2025, offering significant revenue visibility. Renewables and Rail & Metro sectors contributed significantly to recent order growth, with exports accounting for 25-30% of its backlog. Financially, revenue in Q2 FY26 grew 23.3% year-on-year, while profit after tax surged approximately 5X to ₹264 crore, driven by enhanced EBITDA margins nearing 15.2%. Data centers represent a new, substantial opportunity for grid connections and infrastructure.

Kalpataru Projects: Multi-Vertical Strength

Kalpataru Projects International, a global EPC company, holds a diversified portfolio including power T&D, oil and gas, water, and railways. Its consolidated order book reached a record ₹64,682 crore in Q2 FY26, providing about three years of revenue visibility. Power T&D constitutes 40% of this backlog. The company saw strong revenue growth of 31% year-on-year to ₹6,529 crore in Q2 FY26, with T&D revenue climbing 51%. Profit after tax expanded by 89% to ₹237 crore. Kalpataru is also poised to benefit from the growth in digital infrastructure and data centers.

KEC International: Middle East Success

KEC International, part of the R P Goenka Group, is a leading EPC player with a significant global presence. T&D remains its primary growth engine, accounting for 65% of revenue in the first half of FY26. The company has secured its largest-ever EPC order, valued at over ₹3,100 crore, in the UAE, alongside a substation order in Saudi Arabia exceeding ₹1,000 crore. Its T&D order book stood at ₹39,325 crore as of September 2025. Revenue increased by 19% year-on-year to ₹6,092 crore in Q2 FY26, with PAT growing 88% to ₹161 crore. Manufacturing capacity expansions are underway to support project execution.

Valuation and Outlook

While Return on Equity (RoE) for these capital-intensive businesses lags, their Return on Capital Employed (RoCE) is robust. Following recent corrections, these stocks trade at a discount to historical median multiples, though still above the industry median. The transmission and distribution theme represents a long-term structural investment cycle, supported by policy and sustained spending. Growth drivers include renewable energy evacuation, grid modernization, data centers, and railway infrastructure. A potential risk lies in the dependence on government order inflows slowing down.