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Mint
2 days ago
- Business
- Mint
As India switches gears to renewable energy, these five switchgear stocks may benefit
Renewable energy generation in India is on the rise, which in turn is raising demand for switchgear and switchboard parts to support grid infrastructure. Switchgear plays a crucial role in controlling, protecting and isolating electrical equipment to ensure that electricity is distributed safely and efficiently. Increasing demand for smart switchgear is an upcoming trend in the market, and investors are looking for opportunities for long-term gains. Here are five switchgear stocks to watch in 2025. These have been filtered using Equitymaster's powerful stock screener – best switchgear stocks in India. #1 CG Power & Industrial Solutions Headquartered in Mumbai, CG Power is an 86-year-old engineering conglomerate and a leader in the electrical engineering industry. It has two business lines—industrial systems and power systems. The company provides a comprehensive array of switchgear products. Its product portfolio includes: These are crucial components for power distribution, protection, and control in the industrial, commercial, and utility sectors. Also read: As India looks to attract global EV makers, these five companies could win big The company plans a capacity expansion of switchgears (Nashik) for ₹155 crore. The board has also approved a greenfield expansion for 45,000 mega volt-amperes (MVA) of power transformer capacity for ₹712 crore, which would increase its overall capacity to 85,000 MVA by FY28. In the MV switchgear business, the company expanded its presence in the metro segment by securing a 33kV AIS order for projects in Bhopal, Indore, and Agra. It operates world-class switchgear manufacturing facilities at Nashik and Aurangabad in Maharashtra. Revenue increased at a compounded annual growth rate (CAGR) of 39.5% over the past three years, while net profit has grown slowly since FY22. The company maintained strong financial health, with an average return on equity (RoE) of 45.9% and return on capital employed (RoCE) of 53.8%. #2 GE Vernova T&D India GE T&D is the listed entity of GE's Grid Solutions business in India. It builds power transmission and distribution infrastructure, and has a product portfolio comprising the entire range of transmission equipment up to EHV (765 kV and beyond), including AIS and locally manufactured power transformers and GIS. The company offers products for the power industry, including power transformers, circuit breakers, switchgear, instrument transformers, substation automation equipment, digital software solutions and more. It manufactures electricity distribution and control apparatus for switching or protecting electrical circuits – switches, fuses, voltage limiters, surge suppressors, junction boxes, etc. This contributes 23.7% of the company's revenue. Revenue has been flat over the past three years, while the company recorded a strong bottom line in 2024 after a bout of losses. It has an average RoE of 4.9% and RoCE of 10.6%. #3 Voltamp Transformers Voltamp Transformers is a Baroda-based company that primarily manufactures various types of oil-filled power & distribution transformers of various classes. It has two main business segments: Its clients include companies in the power, oil refinery, textile, chemical, real estate, automobile, infrastructure, and steel sectors. These include Larsen & Toubro, TECHNIP, Thyssenkrupp, Toyo, Petrofac, Engineers India, Tata Projects, Thermax, Siemens, ABB, GE and Hitachi. The company has four manufacturing facilities in Gujarat with a total installed capacity of 14,000 MVA. Also read: Five shipbuilding stocks to watch as India strengthens ties with Japan Revenue increased at a CAGR of 32.7% over the past three years, while net profit grew at a CAGR of 39.9%. The company has maintained strong financial health, with an average RoE of 18.3% and RoCE of 23.9%. #4 HPL Electric & Power The companyis a leading electrical equipment manufacturer in India, with a significant presence in five product verticals – metering solutions, modular switches, switchgears, LED lighting, and wires& cables. It is the largest manufacturer of on-load change-over switches, with a50%market share in India. It also has a 20% sharein domestic electric meters, and 5% in LV switchgear. The company has seven manufacturing facilities in Gurugram, Jabli, Kundli & has an order book of more than ₹3,500 crore as of 20 May. Revenue grew 16.39% and domestic switchgear grew 16% in FY25. Revenue grew at a CAGR of 18.6% over the past three years, while net profit grew at a CAGR of 63.3%. The company maintained strong financial health, with an average RoE of 3.4% and RoCE of 13.9%. #5 RMC Switchgears Incorporated in 1994, RMC Switchgears is in the business of switchgear engineering and early contractor involvement (ECI) contracts for the power distribution/transmission sector. Its manufacturing facilities are located at Badodiya, with an installed production capacity of 36,000 MT. RMC Switchgears caters to diverse industries including railways, electrical, utility, aerospace, automotive, roads & highways, oil & gas, chemical processing, and cooling towers. The company is developing innovative products such as advanced metering infrastructure and distributed automation systems. These are designed to minimise transmission losses and enhance the efficiency of India's evolving electrical infrastructure. It is also focusing on products such as smart meter enclosures and distribution boxes for various transformers. Revenue grew at a CAGR of 57.2% over the past three years, while net profit grew at a CAGR of 221.1%. The company has maintained strong financial health, with an average RoE of 17.5% and RoCE of 27.9%. Also read: Top 5 precision engineering stocks in India to add to your watchlist Conclusion Switchgear companies play a critical role in India's energy transition, electrification push, and infrastructure upgrades. Investors could consider these stocks based on the company's market position, scalability, and future growth. It's important, however, to keep in mind the risks of margin volatility, policy execution, and competitive differentiation. Thorough research on financials and corporate governance is vital before making any investment decisions to ensure they align with your financial goals and risk appetite. Happy investing! Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. This article is syndicated from
Mint
7 days ago
- Automotive
- Mint
Top 5 precision engineering stocks in India to add to your watchlist
As India enters a new era of advanced production, precision engineering is gaining importance. From defence and aerospace to railways, this high-tech approach is helping the country move beyond basic production and into the future with smarter, more advanced manufacturing. With investors now hunting for companies riding this wave, here are fiveprecision engineering stocks worth tracking. These stocks are filtered using Equitymaster's stock screener -Best Precision Engineering Stocks in India. #1 KPIT Technologies The company provides embedded software and product engineering services to automotive companies. It provides solutions for autonomous driving, connected vehicles, vehicle engineering and design, electric and conventional powertrains, and integrated diagnostics. The company has development centres in Europe, the US, Japan, and China. Its approach involves using algorithms and semantic annotation to build perception systems that accurately capture and interpret the road, especially in complex urban environments. KPIT also offers various solutions in integrated electrification, new-generation vehicle platforms, and digital twin technologies, further emphasizing the precision required for these advanced systems. The company, in May 2025, approved the 100% acquisition of four Caresoft entities. The transaction will be completed over a period of three years. Caresoft Global will restructure its business into two segments, benchmarking and engineering solutions. KPIT will acquire the carved-out engineering solutions business globally, which is primarily focused on the off-highway, truck and bus segments, as well as manufacturing solutions. Apart from this, it has established a new technology centre in Gothenburg, Sweden. Going forward, the company is working on three key fronts to meet BS VI norms, making internal combustion engines cleaner and more efficient, developing battery-powered electric vehicles, and advancing fuel cell technology. #2 Unimech Aerospace The high-precision engineering solutions company handles some of the most complex manufacturing needs across industries like aerospace, defence, energy, and semiconductors. Unimech Aerospace takes care of everything from machining and fabrication to assembly and testing. Whether you're building exactly according to a blueprint ('build to print') or creating parts to specific requirements ('build to specification'), they have you covered. It's known for making tools and components such as mechanical assemblies, electro-mechanical systems, and key parts for aero engines and airframes. The product range includes aero-engine tooling, airframe tooling, precision missile components, and advanced subsystems like the Rocker Arm for HMC CDA. In FY25, the company made significant strides by focusing on important sectors like nuclear, defence, and semiconductors, boosting its capacity by an impressive 240% and adding seven new customers. Unimech is also evolving beyond its traditional role as a vendor, positioning itself as a critical manufacturing partner across several strategic industries. Also read: United Spirits is on a high after RCB's IPL win, JP Morgan upgrade and UK FTA. Can it keep buzzing? Unimech Aerospace Share Price Since Listing #3 MTAR Technologies MTAR Technologies is a key name in India's precision engineering space. It is known for manufacturing mission-critical components and assemblies with extremely tight tolerances, as precise as 5-10 microns. These high-precision parts are used in projects of national importance across nuclear, space, defence, and clean energy sectors. Founded in 1970, MTAR has steadily evolved into a technology-driven company with advanced manufacturing facilities and a strong track record of supporting India's most strategic programs. The company plays a vital role in the Indian civil nuclear power program, the Indian Space Research Organisation (ISRO), and the Defence Research and Development Organisation (DRDO), while also serving global players like Bloom Energy, Rafael, and Elbit. MTAR's product portfolio includes liquid propulsion engines for the GSLV Mark III, base shroud assemblies and airframes for the Agni missile series, actuators for the LCA (Light Combat Aircraft), fuel cell power units, and critical reactor components, etc. The company has also developed import-substitute products like high-precision ball screws and water-lubricated bearings, which are crucial for nuclear and defence applications. With this wide variety of complex product portfolios, MTAR has created a niche for itself in the Indian precision engineering industry. It's one of the top three suppliers that caters to precision engineering requirements of Indian nuclear, defence, and space sectors. #4 Harsha Engineers The company is the largest manufacturer of precision bearing cages in the organised sector in India in terms of capacity and operations. It's also among the leading manufacturers of precision bearing cages in the world with a market share of approximately 5-6% in the organized segment of the global brass, steel, and polyamide bearing cages in terms of revenue. The company offers a range of bearing cages made from brass, steel, and polyamide, as well as precision components, complex stamped components, brass castings, and bronze bushings. Further, the company has the expertise to design and develop advanced tooling in-house which enables us to manufacture complex products. In April 2025, it signed a letter of intent with a leading multinational engaged in manufacturing AC compressors. Under this agreement, it will supply stamping products for a period of five years. The estimated contract size is ₹180 million (m) per annum. #5 Gala Precision Engineering Last on the list is Gala Precision Engineering. Gala Precision Engineering Limited is a leading precision component manufacturer specialising in technical springs and fastening solutions. Their product offerings include disc and strip springs (DSS), such as wedge lock washers, coil and spiral springs (CSS), and special fastening solutions (SFS). These components are essential for original equipment manufacturers (OEMs), tier 1 suppliers, and channel partners across various industries. These include renewable energy (wind turbines and hydropower plants), industrial sectors (electrical, off-highway equipment, infrastructure, general engineering), and mobility (automotive and railways). The company operates through two main business divisions: the springs technology division, which produces disc spring systems (DSS) such as wedge lock washers (WLW) and circlip safety systems (CSS), and the special fasteners segment (SFS), which manufactures anchor bolts, studs, and nuts. It has established a strong global presence, supplying technical springs and high-tensile fasteners to customers in Germany, Denmark, China, Italy, Brazil, the US, Sweden, and Switzerland. Going forward, the company plans to expand its existing facility in Wada and establish a new plant in Chennai. Conclusion With the global precision engineering machines market projected to reach US$ 23.24 billion (bn) by 2032, growing at a CAGR of 6.4%, the momentum in this sector is undeniable. India is well-positioned to capitalise on this trend thanks to a combination of key advantages: a large pool of skilled engineers, cost-effective manufacturing, supportive government policies, and a strong push for self-reliance under theAatmanirbhar Bharat initiative. Global companies are increasingly looking to India for high-quality, reliable manufacturing, and homegrown firms are rising to the challenge—especially in sectors like defence, aerospace, semiconductors, and clean energy. For investors, this isn't just a short-term play. It's a long-term opportunity backed by real demand, government support, and growing global interest. If you're looking to tap into India's industrial growth story,precision engineering stocks are definitely worth a closer look. However, it's important to conduct thorough research on financials and corporate governance before making investment decisions, ensuring they align with your financial goals and risk tolerance. Happy Investing. Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. This article is syndicated
Mint
14-05-2025
- Business
- Mint
This Indian pharma company is immune to Trump's new policy. Here's why
Next Story Equitymaster This pharma stock is set to thrive in the years ahead. Here's why... Approximately 72% of overall bulk drugs (raw material called API) required by the pharma sector are currently imported from China. (Image: Pixabay) Gift this article US President Donald Trump's new order poses a challenge to the Indian pharma sector. But there is one pharma company that may thrive in the years ahead. In this article, Equitymaster's co-head of research, Tanushree Banerjee, discusses this and more: US President Donald Trump's new order poses a challenge to the Indian pharma sector. But there is one pharma company that may thrive in the years ahead. In this article, Equitymaster's co-head of research, Tanushree Banerjee, discusses this and more: No matter how high the inflation is, their demand is inelastic. No matter how slow the current profit growth is, these companies spend on R&D for future growth. No matter how stiff the competition is, their patents protect them. No matter how weak the economy is, these companies continue to receive government support. Pharma companies truly deserve to be called 'defensive stocks' for these reasons and more. Going by the same logic, pharma stocks should be resilient and consistent in delivering gains year after year. However, among large Indian pharma stocks, barely any managed to fetch returns significantly higher than bank deposits on an annual basis, over the past decade. This is certainly not a comparison of the safety of pharma stocks versus bank deposits. The latter is an asset class that offers both surety of capital and surety of returns. Pharma stocks, on the other hand, are supposed to be resilient across market cycles, fetching reasonable risk-adjusted returns. But thanks to regulatory bottlenecks, constant government interventions, risk of price wars against generic versions and low success in R&D, the companies often fail to fetch optimum valuations over many years. Nevertheless, in a world with a growing aged population, the pharma sector remains one that cannot be ignored by governments and investors. In fact, here are few reasons why a handful of carefully selected pharma stocks must stay in your watchlist… Supply Chain Resilience Covid-19 laid bare the shortcomings of globalisation by disrupting the flow of vaccines to certain geographies. This caused economies like the US and the EU to localise pharmaceutical production to enhance supply chain control. Meanwhile, companies are also exploring near-shoring options (production in nearby locations) in eastern and southeastern Europe, seeking the twin benefits of cost advantage and a higher degree of control on the supply chain. Self-Reliance for Raw Materials Approximately 72% of overall bulk drugs (raw material called API) required by the pharma sector are currently imported from China. Back in 2022, the share of India's imports of bulk drugs was 66%. However, since Chinese bulk drugs are priced almost 50-60% lower than Indian products, the Chinese API have flooded Indian markets. The government's recent PLI schemes, however, have focussed on self-reliance in bulk drug production. They have offered incentives to produce biologics, biosimilars, and cell and gene therapies instead of simply using them to manufacture generic drugs. Success of Clinical Trials Pharmaceutical companies have historically outsourced manufacturing to Indian producers due to capacity constraints or uncertainty of clinical trials. However, with improved drug development and R&D capabilities provided by the Indian firms, outsourcing now covers more of the value chain, from research to clinical trials. Thus, Indian contract manufacturing and research firms are increasingly focusing on higher-value, innovative products. Digitalisation has further reduced the potential for human error in R&D and manufacturing. So, there is improved quality with higher machine uptime and efficiency. Lower Risk of USFDA Penalties Global quality standards are becoming stricter, with regulatory bodies like USFDA imposing harsher penalties for non-compliance. One example is the USFDA's move to impose civil penalties for incomplete clinical trial data. India has made significant strides in meeting international quality standards, with its share of USFDA inspections declining from 19% in 2013 to 9% in 2024 (though still above the global average of 4%). Finally, there is the trend that we are most bullish about. Shift from Chemical-Based Drugs to Biologics and Biosimilars The global pharmaceutical industry is facing a shift from chemical-based drugs to biologics and biosimilars. While small molecule therapeutics had previously dominated research and captured major market share, the advent of large molecule therapeutics (biologics and biosimilars) has rapidly transformed the pharmaceutical industry. Given their targeted mechanism of action and reduced toxicity, biologics have gained major market share in terms of both revenue and total market. Now, it is the contract research and manufacturing of biologics that holds the secret to big returns in Indian pharma. Biologics takes on an average, 18 years of research with a very low success ratio (1 in 10,000). If commercialised and successfully launched, the rewards are huge. These companies typically enjoy years of exclusivity. That means no competition and good pricing power for the approved drug. But this process is time consuming, costly, and has no guarantee of success. Eventually, the innovator pharma companies (Big Pharma) start looking at alternatives. Rather than go through the whole 18-year cycle, they partner with Indian contract researchers in biologics. But due to the critical nature of the work, entry barriers are huge. The outsourcing candidates need quality research infrastructure and scientists at par with their clients. As a result, despite the huge research outsourcing opportunity, there have been very few players who are able to capitalise on it. Syngene International (a subsidiary of Biocon) is one of the leading contract research organisations (CROs) in India. The company is an integrated service provider offering end-to-end drug discovery, development, and manufacturing services on a single platform (CRAMS). It holds over 400 patents jointly with clients and has 6,000 scientists. Despite the relative uncertain nature of the contract research business, the company has grown profits at a compounded rate of 13% over the last five years. The stock's returns over the past decade were 17.8% per annum, significantly above the returns on bank deposits and higher than most of its peers. So, pharma stocks, in general, may not be the best bets for the long term. The limited revenue visibility could often keep their returns tied to that of other low-risk assets like bank deposits for years. However, certain niche and monopolistic businesses in the sector, like Syngene, certainly deserve a place in your watchlist. Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. This article is syndicated from Topics You May Be Interested In Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Mint
14-05-2025
- Business
- Mint
Trump targets Indian pharma but this company is immune
US President Donald Trump's new order poses a challenge to the Indian pharma sector. But there is one pharma company that may thrive in the years ahead. In this article, Equitymaster's co-head of research, Tanushree Banerjee, discusses this issue: No matter how high the inflation is, their demand is inelastic. No matter how slow the current profit growth is, these companies spend on R&D for future growth. No matter how stiff the competition is, their patents protect them. No matter how weak the economy is, these companies continue to receive government support. Pharma companies truly deserve to be called 'defensive stocks' for these reasons and more. Going by the same logic, pharma stocks should be resilient and consistent in delivering gains year after year. However, among large Indian pharma stocks, barely any managed to fetch returns significantly higher than bank deposits on an annual basis, over the past decade. This is certainly not a comparison of the safety of pharma stocks versus bank deposits. The latter is an asset class that offers both surety of capital and surety of returns. Pharma stocks, on the other hand, are supposed to be resilient across market cycles, fetching reasonable risk-adjusted returns. But thanks to regulatory bottlenecks, constant government interventions, risk of price wars against generic versions and low success in R&D, the companies often fail to fetch optimum valuations over many years. Nevertheless, in a world with a growing aged population, the pharma sector remains one that cannot be ignored by governments and investors. In fact, here are few reasons why a handful of carefully selected pharma stocks must stay in your watchlist… Supply Chain Resilience Covid-19 laid bare the shortcomings of globalisation by disrupting the flow of vaccines to certain geographies. This caused economies like the US and the EU to localise pharmaceutical production to enhance supply chain control. Meanwhile, companies are also exploring near-shoring options (production in nearby locations) in eastern and southeastern Europe, seeking the twin benefits of cost advantage and a higher degree of control on the supply chain. Self-Reliance for Raw Materials Approximately 72% of overall bulk drugs (raw material called API) required by the pharma sector are currently imported from China. Back in 2022, the share of India's imports of bulk drugs was 66%. However, since Chinese bulk drugs are priced almost 50-60% lower than Indian products, the Chinese API have flooded Indian markets. The government's recent PLI schemes, however, have focussed on self-reliance in bulk drug production. They have offered incentives to produce biologics, biosimilars, and cell and gene therapies instead of simply using them to manufacture generic drugs. Success of Clinical Trials Pharmaceutical companies have historically outsourced manufacturing to Indian producers due to capacity constraints or uncertainty of clinical trials. However, with improved drug development and R&D capabilities provided by the Indian firms, outsourcing now covers more of the value chain, from research to clinical trials. Thus, Indian contract manufacturing and research firms are increasingly focusing on higher-value, innovative products. Digitalisation has further reduced the potential for human error in R&D and manufacturing. So, there is improved quality with higher machine uptime and efficiency. Lower Risk of USFDA Penalties Global quality standards are becoming stricter, with regulatory bodies like USFDA imposing harsher penalties for non-compliance. One example is the USFDA's move to impose civil penalties for incomplete clinical trial data. India has made significant strides in meeting international quality standards, with its share of USFDA inspections declining from 19% in 2013 to 9% in 2024 (though still above the global average of 4%). Finally, there is the trend that we are most bullish about. Shift from Chemical-Based Drugs to Biologics and Biosimilars The global pharmaceutical industry is facing a shift from chemical-based drugs to biologics and biosimilars. While small molecule therapeutics had previously dominated research and captured major market share, the advent of large molecule therapeutics (biologics and biosimilars) has rapidly transformed the pharmaceutical industry. Given their targeted mechanism of action and reduced toxicity, biologics have gained major market share in terms of both revenue and total market. Now, it is the contract research and manufacturing of biologics that holds the secret to big returns in Indian pharma. Biologics takes on an average, 18 years of research with a very low success ratio (1 in 10,000). If commercialised and successfully launched, the rewards are huge. These companies typically enjoy years of exclusivity. That means no competition and good pricing power for the approved drug. But this process is time consuming, costly, and has no guarantee of success. Eventually, the innovator pharma companies (Big Pharma) start looking at alternatives. Rather than go through the whole 18-year cycle, they partner with Indian contract researchers in biologics. But due to the critical nature of the work, entry barriers are huge. The outsourcing candidates need quality research infrastructure and scientists at par with their clients. As a result, despite the huge research outsourcing opportunity, there have been very few players who are able to capitalise on it. Syngene International(a 70% subsidiary of Biocon) is one of the leading contract research organisations (CROs) in India. The company is an integrated service provider offering end-to-end drug discovery, development, and manufacturing services on a single platform (CRAMS). It holds over 400 patents jointly with clients and has 6,000 scientists. Despite the relative uncertain nature of the contract research business, the company has grown profits at a compounded rate of 13% over the last five years. The stock's returns over the past decade were 17.8% per annum, significantly above the returns on bank deposits and higher than most of its peers. So, pharma stocks, in general, may not be the best bets for the long term. The limited revenue visibility could often keep their returns tied to that of other low-risk assets like bank deposits for years. However, certain niche and monopolistic businesses in the sector, like Syngene, certainly deserve a place in your watchlist. Happy Investing. Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. This article is syndicated from
