Atlanta Electricals Ltd Management Discussions

GLOBAL ECONOMY

Overview

During FY 2025-26, the global economy remained resilient despite elevated geopolitical and trade-policy uncertainties. Subsequent developments during 2026 have further influenced the global outlook, particularly through geopolitical tensions, energy-market volatility and continued technological advancement. The conflict, however, disrupted energy markets, firmed up inflation expectations, and prompted a wholesale re-evaluation of the interest-rate path that had been widely expected at the start of the year. According to the International Monetary Fund (IMF), global growth averaged an estimated 3.5% across 2025 before moderating to a projected 3.0% in calendar 2026, with a partial rebound to 3.4% forecast for 2027.

The slowdown in momentum results from two opposing factors. On the one hand, the conflict in the Middle East has caused a negative supply shock, increasing commodity prices and disrupting energy supplies. On the other hand, a positive technology shock, driven by rapid advancements and increased adoption of artificial intelligence (AI), has boosted activity in economies involved in the global technology supply chain. The effects vary significantly by country: energy exporters outside the conflict zone have gained from improved trade terms, while economies engaged in technology-driven growth, even if they are net energy importers, have seen stronger activity. Conversely, energy-importing countries with little participation in the technology industry, many of them low-income, have experienced a decline in activity.

On the price front, the multi-year disinflation trend has stalled. Global headline inflation is expected to have risen from 4.1% in 2025 to 4.7% in 2026, but is expected to ease to 3.9% in 2027, with the near-term increase driven principally by higher energy and food prices. Core inflation is expected to return to target only gradually across major economies. World trade volume growth is projected to slow sharply from 5.0% in 2025 to 3.5% in 2026, before recovering to 4.3% in 2027, reflecting earlier front-loading of trade, the drag from tariffs, and the gradual re-routing of supply chains. The revision is attributed chiefly to higher energy and food costs: crude oil is assumed to average close to US$89 a barrel in 2026, with energy prices running roughly 25% above their pre-conflict levels.

Advanced Economies

Growth across advanced economies is projected to grow at 1.7% in 2026 and 1.8% in 2027, with outcomes remaining uneven within the group. In the United States, growth is projected at 2.3% in 2026 and 2.2% in 2027, supported by fiscal policy, accommodative financial conditions, and sustained technology-related business investment, with limited impact from the conflict given the countrys status as a net energy exporter.

The euro area is projected to grow at 0.9% in 2026 and 1.2% in 2027, weighed down by higher energy prices and soft consumer confidence. The United Kingdom is expected to grow 1.0% in 2026 and 1.3% in 2027 as the energy shock fades, while Japan is projected to slow to 0.6% in 2026 before a modest recovery to 0.7% in 2027. Korea stands out among advanced economies, with growth expected to rise to 2.6% in 2026 and 2.5% in 2027, buoyed by strong external demand for semiconductors.

Emerging Market and Developing Economies (EMDEs)

Growth across EMDEs is projected to moderate to 3.8% in 2026 before recovering to 4.5% in 2027, with wide divergence reflecting differences in commodity dependence, geographic exposure, and position in the technology value chain.

Emerging and Developing Asia remains the principal engine of global growth. India is projected to remain among the fastest-growing major economies, with growth of 6.4% on a fiscal-year basis, underpinned by strong momentum in private consumption and services activity.

Chinas growth is projected to slow to 4.6% in 2026, as higher global oil prices, protracted uncertainty, and structural headwinds weigh on activity. Technology-exposed economies such as Vietnam (7.5%) and Malaysia (4.7%) are set to benefit from the upturn in the global technology cycle.

Middle East and Central Asia face the sharpest near-term disruption. Regional growth is projected to fall steeply to 0.7% in 2026 before rebounding to 6.5% in 2027, consistent with a prolonged closure of the Strait of Hormuz followed by a corresponding recovery. Saudi Arabia, benefiting from more diversified export routes, is forecast to grow 1.7% in 2026 and 5.5% in 2027.

Sub-Saharan Africa is expected to remain broadly stable. Regional growth is projected at 4.3% in 2026 and 4.5% in 2027, though this masks substantial divergence, with oil-importing economies more adversely affected by higher energy and food prices.

Latin America and the Caribbean is projected to be stable. Growth is expected at 2.4% in 2026, rising modestly to 2.7% in 2027, with resilient activity in Brazil and a modest acceleration in Mexico.

Emerging and Developing Europe is expected to remain restrained at approximately 2.0%, with Russia maintaining a growth rate of 1.1%, supported in part by higher commodity export revenues.

Outlook

The near-term global outlook is subdued but stabilising, contingent on an orderly normalisation of energy markets and the continued, if slowing, contribution of the technology cycle. Energy prices are expected to stay above

The slowdown in momentum results from two opposing factors. On the one hand, the conflict in the Middle East has caused a negative supply shock, increasing commodity prices and disrupting energy supplies. On the other hand, a positive technology shock, driven by rapid advancements and increased adoption of artificial intelligence (AI), has boosted activity in economies involved in the global technology supply chain. The effects vary significantly by country: energy exporters outside the conflict zone have gained from improved trade terms, while economies engaged in technology-driven growth, even if they are net energy importers, have seen stronger activity. pre-war levels, crude oil and natural gas rising about 32% and 22% respectively in 2026 over 2025, and food prices around 8%, keeping monetary policy focused on price stability and less accommodative than in prior years. Risks remain tilted to the downside, chiefly renewed Middle East tensions and commodity volatility, supply-chain disruption, trade fragmentation, a possible correction in AI-driven market expectations, and weakened fiscal buffers; upside potential lies in faster energy normalisation, stronger technology investment, renewed trade cooperation, and growth-supportive reforms. For enterprises, this points to steady growth, gradually easing inflation, and heightened sensitivity to geopolitical and commodity-market shifts — warranting cautious planning alongside readiness to capitalise on resilient demand in technology-linked and domestic markets, notably India.

INDIAN ECONOMY

Overview

Indias economy continued to maintain a strong growth trajectory, with real GDP projected to expand by 7.6% in FY26, according to estimates by the Ministry of Statistics and Programme Implementation (MoSPI). This outlook underscores the countrys robust macroeconomic fundamentals despite prevailing global uncertainties. Nominal GDP, which incorporates price movements including inflation, is estimated to grow by 8.6% during

61.5%

The share of Final Private

Consumption Expenditure (PFCE) in GDP is expected to increase to 61.5% in FY26.

In addition to consumption, investment activity continued to play a significant role in driving economic expansion during FY26. Gross Fixed Capital Formation (GFCF) is estimated to account for approximately 30.0% of GDP. Investment momentum strengthened during the first half of the fiscal year, with GFCF growing by 7.6%, surpassing the pace recorded in the corresponding period of the previous year and remaining above the pre-pandemic average growth rate of 7.1%.

Domestic demand continued to underpin Indias economic growth in FY26. According to the First Advance Estimates, the share of Final Private Consumption Expenditure (PFCE) in GDP increased to 61.5% during the year. The sustained strength in consumption reflects a supportive macroeconomic environment characterised by relatively low inflation, stable employment conditions, and improving real purchasing power. Rural consumption remained resilient, supported by strong agricultural performance, while urban consumption gradually improved, aided by the rationalisation of direct and indirect taxes. Together, these factors indicate that consumption-led growth remains broad-based across the economy.

the year, reflecting a balanced expansion in both economic output and price levels.

The growth momentum has been supported by consistent quarterly performance, with real GDP growth of 8.4% recorded in Q2 and 7.8% in Q3 (October–December), indicating resilience across key sectors of the economy. In recent years, India has sustained stable growth levels, with real GDP growth of 7.2% in FY2023–24 and 7.1% in FY2024–25. During the same period, nominal GDP growth stood at 11.0% and 9.7%, respectively.

The manufacturing sector continues to play a pivotal role in driving economic expansion, registering double-digit growth, and reinforcing Indias position as a key industrial hub. This momentum has been further supported by steady contributions from the secondary and tertiary sectors, reflecting the broad-based nature of the countrys economic growth.

30%

Gross Fixed Capital Formation (GFCF) is estimated to account for approximately 30.0% of GDP.

The agriculture and allied sectors are estimated to grow by 3.1% in FY26. Agricultural performance during the first half of the fiscal year was supported by a favourable monsoon, leading to agricultural GVA growth of 3.6%, higher than the 2.7% growth recorded during the same period in FY25, though still below the long-term average of 4.5%. Allied activities, particularly livestock and fisheries, have demonstrated relatively stable growth in the range of 5–6%. With the increasing share of allied activities in agricultural GVA, overall agricultural growth is increasingly shaped by the interplay between the relatively volatile crop segment and the more stable expansion in allied sectors.

OUTLOOK

Indias medium-term growth prospects remain among the strongest globally. Major agencies project real GDP growth of approximately 6.5–6.6% for FY2026–27, with the Reserve Bank of India and the World Bank forecasting 6.6% and the IMF around 6.5%, despite anticipated global slowdown to about 3.0% in 2026. Domestic support continues through resilient private consumption, strong agricultural output, an accommodating interest rate cycle, ongoing government capital expenditure, and urbanisation trends. Short-term risks are mainly external, including high global energy prices, geopolitical tensions in West Asia, and changing trade and tariff policies. Headline inflation was relatively low through much of 2025, averaging 1.7% from April to December 2025, but started rising due to higher oil prices, a development that requires close attention. The real estate sector benefits from a favourable macroeconomic setting: lower home-loan rates, structural urban housing demand, rising incomes, and household formation, complemented by reforms like the National Real Estate Policy 2025s single-window clearance and SEBIs REIT reforms, which support continued growth into FY2026–27.

3.1%

The agriculture and allied sectors are estimated to grow by 3.1% in FY26.

The industrial sector showed steady improvement in FY26, with manufacturing growing 8.4% in H1, surpassing the full-year estimate of 7.0%. Construction remained resilient, supported by strong public capex and infrastructure momentum. Manufacturings share in GDP held steady at 17–18%, with GVO at ~38%, comparable to services. Overall industrial growth is projected at 6.2% in FY26 (vs. 5.9% in FY25), with Q3 indicators such as PMI, IIP, and e-way bills reflecting strengthening demand. Construction indicators, including steel and cement consumption, also recorded stable growth. The outlook remains positive, supported by GST rationalisation and favourable demand conditions.

On the supply side, services continue to drive growth, with GVA expanding 9.3% in H1 FY26 and an estimated 9.1% for the full year. Growth was broad-based across segments, with most sub-sectors exceeding 9%, except trade, hospitality, and related services, which remain slightly below pre-pandemic levels.

INDIAN POWER INDUSTRY

Electricity remains one of the most critical yet often unseen pillars of modern life, powering homes, industries, agriculture, healthcare, and digital infrastructure. For a country of Indias scale and diversity, ensuring reliable, affordable, and universal access to electricity is both a complex technical undertaking and a significant governance achievement. Over the past decade, the Indian power sector has undergone a structural transformation, evolving into a system defined by improved capacity adequacy, enhanced reliability, and stronger institutional frameworks.

Today, India is the worlds third-largest producer and consumer of electricity, and its power sector ranks among the most diversified globally, drawing on coal, lignite, gas, nuclear and large hydro alongside a rapidly expanding renewable base of solar, wind, biomass and small hydro. During the financial year 2025-26, the sector recorded a series of structural milestones: total installed generation capacity crossed 533 GW, non-fossil sources moved past half of installed capacity, and the grid met a record peak demand without any shortage. These developments reflect a decade of sustained investment across the generation, transmission and distribution value chain, and set the backdrop against which the Company operates.

Thermal power remains dominant, with coal at 43%, while renewables, solar, wind, small hydro, and bio-energy, contribute nearly 40%. Large hydropower is about 10%, and gas, nuclear, lignite, and diesel make up the rest, showing a shift towards a sustainable energy mix.

The mix shows a clear shift, with solar becoming Indias top renewable source and second overall after coal. India is the third-largest renewable energy producer. In FY2025-26, the sector added about 65 GW, including a record 35 GW of solar capacity.

Importantly, the shift in installed capacity does not yet reflect the generation mix. FY2025-26 peak shows thermal sources supplying nearly 67%, solar over 21%, and hydro about 4.4%. Coal will probably remain the main reliable base-load source during the transition, despite its declining share of capacity. The CEAs Long-Term Resource Adequacy Plan projects about 1,121 GW of capacity by FY2035-36, with solar at 509 GW, wind 155 GW, coal 315 GW, large hydro 78 GW, and nuclear 22 GW. Non-fossil sources are expected to reach around 70% of capacity by then.

Electricity demand has risen sharply in step with economic growth, industrialisation, rising incomes and increased cooling requirements. During FY2025-26, India met an all-time high peak power demand of 256.1 GW without resorting to load shedding, supported by record capacity additions of about 65 GW during the year. Energy shortage at the national level has narrowed to about 0.03% in FY2025-26, from 4.2% in FY2013-14, underlining a decisive improvement in supply adequacy and grid reliability. Per capita electricity consumption rose to 1,460 kWh in FY2024-25, an increase of 52.6% over the 957 kWh recorded in FY2013-14.

Parallel to generation expansion, significant investments have been made in strengthening the transmission and distribution infrastructure. Indias national grid, now one of the largest synchronous grids globally, has surpassed 5 lakh circuit kilometres of transmission lines, with transformation capacity reaching 1,407 GVA. These enhancements have improved grid stability, reduced transmission bottlenecks, and enabled the seamless integration of renewable energy into the power system.

The sector has also witnessed notable improvements in operational efficiency and financial health. Power shortages have declined sharply from 4.2% in FY2014 to just 0.03% by December 2025, reflecting enhanced supply adequacy and better demand management. Electrification initiatives have extended connectivity to over 18,000 villages and nearly 2.86 crore households, significantly improving access in rural and semi-urban regions. Additionally, reforms in the distribution segment have led to a reduction in outstanding dues and a return to profitability for DISCOMs, supported by improved billing efficiency and the ongoing rollout of smart metering.

Indias ability to meet a peak power demand of 256.1 GW during FY2025–26 underscores the growing resilience of the sector. Reliable electricity supply has reduced dependence on alternative energy sources such as diesel, contributing to cost efficiencies and improved environmental outcomes.

Transmission and Distribution (T&D) Network

The T&D network has expanded with growth in generation, crucial for integrating renewable energy. As of January 2026, Indias 220 kV+ transmission network exceeded 500,000 circuit km with 1,407 GVA capacity. Since 2014, it grew 71.6%, adding 2.09 lakh km and 876 GVA. Inter-regional transfer capacity is now 120,340 MW, supporting One Nation, One Grid, One Frequency.

The National Electricity Plan aims to expand the transmission network to 6.48 lakh circuit km and increase transformation capacity to 2,345 GVA by 2031-32, requiring 9.16 lakh crore. This involves new lines, substations, and reactive power facilities, impacting demand for electrical equipment like transformers.

Key focus of the government on the development of the power sector

Government policy is the key factor shaping the sectors future. India aims for 500 GW of non-fossil capacity by 2030 and net-zero emissions by 2070, announced at COP26. By 2025, India exceeded 50% non-fossil capacity, five years early, showing effective policies across generation, transmission, distribution, and storage.

x PM Surya Ghar: Muft Bijli Yojana, the flagship rooftop solar scheme targeting one crore households, with an allocation of 20,000 crore in the Union Budget 2025-26 (an increase of about 80%); over 9.56 GW of rooftop solar had been installed by March 2026.

x PM Kusum Scheme: It supports the solarisation of agricultural pumps and decentralised solar generation for farmers.

x Solar Parks, Ultra Mega Solar Power Projects, and the PLI Schemeforhigh-efficiency solar PV modules focus on fostering domestic manufacturing and decreasing reliance on imports.

x National Green Hydrogen Mission and viability gap funding for offshore wind, broadening the clean-energy base; the wind sector is targeting about 100 GW of capacity by 2030.

x Nuclear Energy Mission: Launched in the Union Budget 2025-26, targeting 100 GW of nuclear capacity by 2047 and supporting research into Small Modular Reactors (SMRs).

x National Electricity Plan (Transmission): Prepared to evacuate 500 GW of renewable capacity by 2030 and over 600 GW by 2032, with around 1,91,000 circuit kilometres of new lines and 1,270 GVA of transformation capacity, supported by Green Energy Corridors and waivers of inter-state transmission charges for solar and wind.

x Energy storage: The CEAs Long-Term National Resource Adequacy Plan envisages 174 GW / 888 GWh of storage (battery energy storage and pumped storage) by 2035-36, supported by viability gap funding for battery systems.

OUTLOOK

The Indian power sector is set to experience a decade of significant capital investment. Increasing demand, a rapidly evolving generation mix, expansion of the transmission grid driven by renewable energy, distribution upgrades under the RDSS, and large-scale energy storage deployment all indicate ongoing, multi-year growth in grid and electrical infrastructure. With capacity for transformation expected to nearly double by FY2031-32 and total sector investments estimated around 9 lakh crore for transmission alone, the environment is highly favorable for domestic manufacturers of transformers, substations, and related T&D equipment. This macroeconomic context supports the Companys growth strategy and the opportunities it aims to seize in the coming years.

INDIAN POWER DISTRIBUTION INDUSTRY

Distribution represents the final and most visible stage in the electricity value chain, directly delivering power to households, farms, industries, and businesses. It is also where the sectors revenues are ultimately generated. Historically considered the weakest link in Indias power system, the distribution segment has seen a significant turnaround in recent years. In FY2024-25, distribution utilities returned to profit for the first time in over a decade, with total technical and commercial losses decreasing to around 15%. Additionally, the gap between the cost of supply and the revenue earned narrowed to just a few paise per unit. As the interface between an expanding grid and a growing consumer base, and given its high reliance on transformers and related equipment, distribution plays a crucial role in the Companys operating environment.

Within the power value chain, the distribution segment transfers electricity from the high-voltage grid to end users. Distribution transformers step down voltage, from 33 kV to 11 kV or 415/230 volts., making it suitable for residential, commercial, agricultural, and industrial use. Managed by distribution companies (DISCOMs), mostly state-owned

The Indian power sector is set to experience a decade of significant capital investment. Increasing demand, a rapidly evolving generation mix, expansion of the transmission grid driven by renewable energy, distribution upgrades under the RDSS, and large-scale energy storage deployment all indicate ongoing, multi-year growth in grid and electrical infrastructure. With capacity for transformation expected to nearly double by FY2031-32 and total sector investments estimated around 9 lakh crore for transmission alone after the unbundling of former State Electricity Boards under the Electricity Act, 2003, some private and franchisee licensees operate in metros like Delhi, Mumbai, Kolkata, and Ahmedabad. Retail tariffs are set by State Electricity Regulatory Commissions (SERCs).

The distribution network includes 14.8 million transformers, 2.7 lakh feeders, and extensive high- and low-tension lines. Recent developments like financial recovery, tariff rationalisation, and digitalisation are reshaping demand for distribution equipment.

KEY FOCUS AREAS OF THE GOVERNMENT: REFORMS AND THE RDSS

The series of reform initiatives, starting from the Accelerated Power Development and Reforms Programme to UDAY in 2015, have aimed to reduce DISCOM debt and conclude with the launch of the Revamped Distribution Sector Scheme (RDSS) in 2021, marking a key point in distribution reforms. With an approximate total budget of 3.03 lakh crore, including a gross budgetary support of 97,631 crore, the RDSS is a results-based scheme where fund releases depend on operational and financial achievements.

It consists of two components: Part A covers financial support for prepaid smart metering and distribution infrastructure upgrades, while Part B focuses on training, capacity building, and enabling activities. Power Finance Corporation and REC Limited serve ation and rising rural and as the nodal agencies. The main goals are to reduce AT&C losses to 12-15% and to close the gap between the cost of supply and the revenue collected.

Under the scheme, projects totalling approximately 2.83 lakh crore has been approved. Of this, around 1.53 lakh crore is allocated to loss-reduction infrastructure, including the upgrade and replacement of distribution transformers, substation modernisation, new substations, conductor replacement, and feeder segregation. About 1.31 lakh crore is designated for smart metering.

These measures are supplemented by tariff rationalisation to align with costs and the 2022 Late Payment Surcharge Rules, which facilitated the clearance of legacy dues. Moving forward, the Draft National Electricity Policy 2026 and the proposed Electricity (Amendment) Bill 2026 indicate an ongoing effort to promote a more market-oriented and financially disciplined distribution sector.

(Source: https://www.pib.gov.in/PressReleasePage.aspx?PRID=1779726)

The cumulative effect of these reforms has been a marked improvement in DISCOM performance. In FY2024-25, distribution utilities collectively recorded a positive profit after tax of about 2,701 crore, their first profit in years, and a striking reversal from a loss of 67,962 crore in FY2013-14.

Operational metrics have improved significantly. The aggregate technical and commercial (AT&C) losses decreased from 21.91% in FY2020-21 to around 15% in FY2024-25, approaching the schemes target range of 12-15%. The difference between the average cost of supply and the actual revenue (the ACS-ARR gap) reduced sharply to about 6 paise per unit in FY2024-25, down from approximately 65 paise in FY2020-21, due to cost-reflective tariffs. Billing efficiency rose from 84.08% to 87.59%, and collection efficiency improved from 92.9% to 97.0% within the same period.

Growth drivers for the distribution sector

The distribution segment sits directly downstream of Indias structural rise in electricity demand and is being reshaped by several reinforcing drivers.

x Rising demand and consumption: With per-capita consumption of about 1,460 kWh still well below global levels and overall demand projected to grow at 6.0-6.5% a year, the distribution network must expand and strengthen continuously to carry higher loads.

x Universal electrification and better supply: Near-universalhousehold urban supply hours are adding connections and load

In FY2024-25, distribution utilities returned to profit for the first time in over a decade, with total technical and commercial losses decreasing to around 15%. Additionally, the gap between the cost of supply and the revenue earned narrowed to just a few paise per unit. As the interface between an expanding grid and a growing consumer base, and given its high reliance on transformers and related equipment, distribution plays a crucial role in the Companys operating environment.

across the network.

x Urbanisation and appliance ownership: Expanding cities, growing air-conditioner penetration and higher appliance ownership are lifting both base-load and peak distribution demand.

x Renewable and distributed generation: The rapid growth of rooftop solar under PM Surya Ghar and of distributed renewables requires distribution-level upgrades and equipment capable of handling bi-directional power flows.

x Electric mobility: The build-out of electric-vehicle charging infrastructure is adding a new and growing category of distribution load.

x Ageing-asset replacement and loss reduction: The replacement of ageing conductors, distribution transformers and substations, together with feeder segregation to curb losses, is driving sustained equipment demand.

x Reform-linked capital expenditure: Large and results-linked government funding under the Revamped Distribution Sector Scheme is financing infrastructure and metering at scale.

Indian Power Transformer Market

Indias power transformer industry has shifted from replacement to capacity-led growth, driven by transmission infrastructure expansion outlined in the National Electricity Plan (Transmission) and the 2030 non-fossil capacity target. The market is projected at about USD 2.3 billion in 2025, with growth estimates around 8-9%. The high-voltage segment (above 100 MVA) is expanding fastest at nearly 9.75% CAGR through 2031. Power utilities account for roughly 47% of revenue. Industry challenges include a tightening procurement environment, with the CEA standardising specifications for transformers of 66 kV and above from January 2026, and reliance on imported raw materials, with nearly 90% of CRGO steel sourced overseas amid an anti-dumping investigation.

Six forces are driving demand, and they are largely independent of one another, which gives the current cycle its durability.

Transmission build-out: The National Electricity Plan (Transmission) programme through 2032 is the primary demand source, adding 400 kV and 765 kV transmission capacity to link generation regions with load centres.

Renewable integration: The 500 GW non-fossil target for 2030 requires evacuation infrastructure at sites with no existing grid presence, and generator step-up transformers designed for variable, cyclical loading rather than steady-state utility duty.

Rising and changing electricity demand: India added a record 52,537 MW of generation capacity across sources during FY2025-26 up to 31 January 2026, and demand growth is now being reinforced by data centres, electric-vehicle charging infrastructure and continued industrial and urban expansion, each drawing transformation capacity at a different voltage level.

Distribution strengthening: Sustained investment under RDSS in feeder segregation, loss reduction and smart metering keeps distribution transformer demand steady alongside the transmission cycle.

OUTLOOK

Indias power distribution sector is set for steady, reform-led growth backed by strong electricity demand. In the near term, the smart-metering rollout and RDSS-funded capital expenditure are expected to continue improving DISCOM finances, while rising demand from cooling, industry, urbanisation and electric mobility keeps adding load and connections.

In the coming years, the network will require substantial upgrades, including more feeders, substations, and transformer capacity, to handle increasing loads from renewable energy sources and electric vehicles. This ongoing demand will drive the need for more distribution transformers and related equipment.

For manufacturers, the environment looks promising: government-led investments, network expansion, renewable energy integration, and the move towards higher-efficiency products all indicate sustained demand.

Major risks involve uneven progress across states, potential delays in implementing smart meters, existing DISCOM debt, and fluctuations in input prices like CRGO steel and copper. Overall, Indias distribution reform policies and their scale offer a strong foundation for growth and present opportunities that the Company is well-positioned to leverage.

COMPANY OVERVIEW

Incorporated in 1988, Atlanta Electricals Limited is among Indias leading manufacturers of power, auto and inverter-duty transformers by production volume, having built over more than three decades a reputation for engineering-led, quality-focused transformer solutions. FY26 marked a defining chapter in the Companys journey, being its first full financial year following the listing of its equity shares on the Stock Exchange on September 2025.

With over thirty years of extensive industry experience, the Company currently designs, manufactures, tests, and services a wide range of transformers, including power, auto, inverter-duty, furnace, generator, and special-duty types. Traditionally one of the few Indian manufacturers capable of producing transformers up to 200 MVA and 220 kV, it has expanded its capabilities to manufacture transformers up to 500 MVA and 765 kV, positioning itself among the select domestic players certified for the highest voltage categories.

Manufacturing is undertaken across five facilities in Gujarat (Anand, Vadod and Ankhi) and Karnataka (Bengaluru), with installed manufacturing capacity of 63,060 MVA, the outcome of an intensive multi-year capacity build-out. The Companys plants are supported by NABL-accredited testing laboratories and ISO-certified processes, underpinning its positioning at the quality and compliance end of the market.

Atlanta serves a diversified customer base of state and central power utilities, private-sector industrial players and renewable-energy developers, with a presence across 19 states and three union territories. Marquee relationships span public-sector utilities and private names such as Adani Green Energy and Tata Power, reflecting the Companys acceptance across both the regulated grid and the fast-growing renewable segment.

Financial review

FY26 was a landmark year for Atlanta Electricals Limited, its first full financial year as a listed company following the September 2025 IPO, and the Company delivered record performance across revenue, profitability and balance-sheet strength, while ending the year free of term debt.

Revenue and profitability

Consolidated revenue from operations rose 48.81% year-on-year to 1,851.52 crore in FY26, from 1,244.18 crore in FY25, the highest in the Companys history. EBITDA grew 77.93% to 344.44 crore, with the EBITDA margin expanding 304 basis points to 18.60%, reflecting strong operating leverage, procurement efficiencies and a richer product mix weighted towards higher-voltage transformers. Profit after tax increased by 70.06 % to 201.77 crore compared to 118.65 crore in FY25. The margin expansion, running well ahead of revenue growth, was the defining feature of the year.

Key financial highlights (consolidated)

Particulars ( crore)	FY26	FY25	Growth
Revenue from operations	1851.52	1244.18	48.81%
EBITDA	344.44	193.58	77.93%
EBITDA margin (%)	18.60%	15.56%	304 bps
Profit after tax	201.77	118.65	70.06%
PAT margin (%)	10.90%	9.54%	136 bps
Earnings per share ( )	27.17	16.57

Operational performance

The Company produced 22,943 MVA during FY26, with installed capacity across its five facilities at 63,060 MVA. The new Vadod facility (Unit-IV) ramped strongly, reaching approximately 39.07% annualised utilisation within its first seven months and contributing around 494.79 crore of revenue, while the Atlanta Trafo unit (Unit 5) commenced scaling at approximately 14.70% annualised utilisation. Other existing facilities continued to operate at high utilisation. In April 2026, the Company received PGCIL approval to manufacture transformers up to the 400 kV class at Unit-IV, an important qualification for larger, higher-margin transmission tenders.

Balance sheet and capital structure

A central achievement of the year was the transition to a debt-free balance sheet. The Company repaid both its Unit-IV facility term loan and the Unit-V acquisition term loan during the year, reporting zero outstanding term debt as at 31 March 2026, having repaid 340 crore of term loans, aided by IPO proceeds and internal accrual. The elimination of term borrowings removes interest outgo and materially enhances financial flexibility for the next phase of growth. Reflecting the larger scale of operations, the Companys overall banking facilities were enhanced from 910 crore to 1,320 crore during FY26, and CRISIL reaffirmed its long-term rating at A/Stable.

Risks and Concerns

The Company operates in a capital-goods industry closely linked to the power sectors investment cycle, and is therefore exposed to a range of business, operational, financial and external risks. The Board and management maintain a structured approach to identifying and mitigating these risks; the principal ones, together with the Companys mitigating measures, are set out below

Ratio	FY26	FY25
Operating profit (EBITDA) margin (%)	18.60%	15.56%
Net profit margin (%)	10.90%	9.54%
Return on net worth (%)	34.11%	39.43%
Debt\u2013equity ratio (x)	0.05	0.40
Interest coverage ratio (x)	5.88	5.65
Current ratio (x)	1.69	1.57
Debtors\u2019 turnover (days)	84	103
Inventory turnover (days)	102	86

As on 31st March, 2026, the Companys Equity Capital stood at 929.19 crore compared to 349.90 crore as of 31st March, 2025. Total long-term borrowings of AEL as of 31st March, 2026 stood at 3.12 crore vis-à-vis 93.03 crore as on 31st March, 2025. Our tangible assets as of 31st March, 2026 stood at 969.95 crore vis-à-vis 463.19 crore as on 31st March, 2025, an increase of 109.40%. Cash and cash equivalents as of 31st March, 2026 stood at 6.69 crore vis-à-vis 0.37 crore as on 31st March, 2025, an increase of 1,708.11%

Order book and revenue visibility

New orders of approximately 2,507.01 crore were booked during FY26, taking the unexecuted order book to 2,492.61 crore as at year-end, with a rising share of higher-voltage 220 kV and 400 kV transformers. Our order-book inflows included marquee wins such as a 288 crore contract from Karnataka Power Transmission Corporation Limited (KPTCL) and orders from an independent power producer executing projects for NTPC. This order book provides healthy visibility over the medium term.

Key financial ratios (consolidated)

In accordance with the SEBI guidelines, the following ratios and the reasons for significant movements are set out below.

Particulars	FY26	FY25
	( in crores)	( in crores)
Total equity	929.19	349.90
Long-term borrowings	3.12	93.03
Short-term borrowings	43.50	48.00
Total non-current assets	580.84	210.13
Trade receivables	424.03	351.71
Cash and cash equivalents	6.69	0.37
Land	72.64	17.76

Analysis of Balance Sheet (consolidated)

RISK DEFINITION

A significant share of the Companys revenue and order book is derived from state electricity utilities and public-sector undertakings, and a meaningful proportion from its top customers; in FY26, the top ten customers accounted for around 78.06% of revenue. Any slowdown in utility ordering, budgetary constraints, or delays in payment could affect revenues and working capital.

A substantial part of near-term growth depends on ramping newly commissioned capacity (the Unit-IV and Unit-V) and executing a large order book. The average execution period for the order book has lengthened to around 12–18 months, which can defer revenue recognition, and delays in customer or regulatory approvals could affect the ramp.

Key inputs, CRGO electrical steel, copper and transformer (mineral) oil, are subject to price volatility, and the Company does not yet have full backward integration. In FY26, a temporary mineral-oil shortage arising from the West Asian conflict affected availability; while managed, a recurrence could disrupt production. Larger contracts typically carry price-variation clauses, but smaller private-sector orders are often fixed price, exposing those margins to commodity movements.

Transformer manufacturing is inherently working-capital intensive, with extended receivable cycles on utility contracts and significant inventory requirements, which can strain liquidity during periods of rapid growth.

Demand is closely tied to government-led transmission and distribution capex and to the broader policy environment. While Indias planned transmission investment of around 9 trillion through 2032 represents a strong structural opportunity, any deceleration in public capex would affect the demand outlook.

The industry is seeing capacity additions across incumbents and new entrants, and there is a possibility of increased Chinese participation in transmission-equipment tenders, though management believes the impact is limited given local-content rules and capacity constraints.

As an exporter that also imports certain inputs, the Company is exposed to currency movements; it was previously exposed to interest-rate risk on its borrowings.

RISK MITIGATION

The Company is progressively diversifying across private-sector industrial customers, renewable-energy developers, and export markets, and is deepening its presence in high-voltage segments that broaden its addressable customer base.

Phased commissioning, disciplined project planning and the recent PGCIL 400 kV approval support an orderly ramp; high legacy-plant utilisation provides a stable base while new units scale.

Price-variation clauses on large orders, procurement efficiencies, use of green (oil-alternative) transformer designs during the oil shortage, and backward-integration initiatives currently underway.

AELs strong financial position, supported by a debt-free balance sheet, strong cash reserves, and disciplined receivables management, has provided substantial headroom.

The Company undertook a conscious decision to diversify its presence across the generation, transmission, distribution, renewables, and industrial applications segments, thereby reducing dependence on any single demand driver.

The Companys extensive industry experience, along with its unique high-voltage expertise, quality standards, approved customer certifications, and customer-focused engineering, enables it to stay ahead in the market.

The transition to a debt-free balance sheet substantially removes interest-rate risk, and forex exposures are monitored and managed through forward contracts and meticulous planning.

Human resources

People play a vital role in fostering a high-performance culture, attracting and retaining talent, and aligning people strategies with the Companys long-term vision. Atlanta Electricals prioritises the recruitment of skilled individuals and focuses on their continuous development. The Company conducts regular training workshops to enhance employees technical and functional capabilities, strengthen teamwork and support personal growth. Training modules span a range of areas, including machine and equipment utilisation, production and operations flow, quality management, and workplace safety. Across its manufacturing facilities, the Company employs a workforce of approximately 1079 people, including contract labour, engaged in functions such as core assembly, coil winding,

Core Coil Assembly, High Voltage and Low Voltage connections, Vapour phase Drying, Tanking transformer testing, material handling, and other related operations.

Internal controls

Atlanta Electricals is committed to establishing and maintaining robust internal control systems that are appropriately matched to the scale and complexity of its operations. The Companys internal audit function periodically reviews the adequacy and effectiveness of these systems, verifying adherence to established policies, applicable regulations, and internal guidelines. Internal processes are tested and refined on an ongoing basis to keep pace with an evolving risk environment and to safeguard the integrity and accuracy of financial reporting. The Company further maintains strict compliance with anti-corruption legislation, requiring its employees and business intermediaries to observe a comprehensive code of conduct. As Atlanta Electricals expands, it remains committed to strengthening its compliance framework and internal controls in support of sustained growth and operational integrity.

Cautionary statement

The information provided by the Company may include forward-looking statements that entail various risks and uncertainties. These statements are based on current expectations, assumptions, and projections about future events, which could change due to factors like market conditions, regulatory changes, and unforeseen challenges. Actual results might differ significantly from those predicted in these statements. The Company is not obligated to update or revise any forward-looking statements to reflect new information, future developments, or changing circumstances. Investors should carefully evaluate the risks and uncertainties that could impact the Companys performance before making any investment decisions.