Quality Power Electrical Equipments Ltd Management Discussions

Disclaimer

The Management Discussion and Analysis may include some forward-looking statements related to possible business or economic developments. These statements reflect the Companys current expectations and outlook for the future. However, many factors could lead to actual outcomes being different from what is expected. The Company does not take on any responsibility to update these forward-looking statements publicly if new information or future events arise. Investors are advised to use their judgment while considering the risks mentioned in this report and how effectively the Company is addressing them, as these are only the risks identified by the Management at this time.

Economy Outlook

Global Economy

The global economy in 2024 expanded moderately despite persistent headwinds. According to the IMFs July 2025 World Economic Outlook, global growth stood at 3.4% in 2024 and is projected at 3.0% for 2025 and 3.1% for 2026. These forecasts represent a slight upgrade over earlier expectations, aided by tariff rollbacks, a softer US dollar and selective fiscal interventions.

While services activity remained resilient and continued to anchor growth, manufacturing in Europe and parts of Asia was subdued, weighed down by supply chain frictions and muted external demand. Inflationary pressures eased further, with headline inflation expected to moderate to 4.2% in 2025, though core inflation remains stubbornly high in some economies, notably the US. Central banks maintained restrictive monetary policies through much of 2024, keeping financial conditions tight; however, signs of easing inflation prompted some to begin signalling a gradual pivot towards policy relaxation.

Despite these improvements, the outlook remains clouded by risks—ranging from volatile financial markets and persistent geopolitical tensions to the uneven impact of tariff adjustments. Multilateral institutions continue to stress the importance of coordinated policy action to safeguard trade flows, stabilize financial systems and enable a path toward sustained and inclusive growth.

Indian Economic Outlook

GDP Growth and Outlook

India has emerged as the worlds fourth-largest economy, with per capita income doubling since 2014 — a testament to its sustained progress and resilience. Despite global headwinds and geopolitical uncertainties, the economy continued on a strong growth path, recording GDP growth of 6.5% in FY 2024–25. Growth was anchored by resilient domestic demand, supported by stable private consumption and surging capital investments, alongside the governments emphasis on infrastructure and strategic reforms.

The Production Linked Incentive (PLI) schemes, robust foreign direct investment (FDI) inflows, and digital infrastructure expansion strengthened Indias position in global value chains, while green energy initiatives and the China+1 shift enhanced competitiveness. Services, construction and agriculture benefited from favourable monsoons and rising rural consumption, broadening the growth base further.

Inflation eased to 3.3%, well within the Reserve Bank of Indias (RBI) target range, aided by stable food prices, supply chain efficiencies, and proactive policy measures. The RBI adopted a calibrated easing stance, reducing the repo rate by 100 basis points to 5.5% (including a 50-bps cut in June 2025) and lowering the CRR, injecting liquidity, lowering borrowing costs and supporting credit availability. These steps, combined with fiscal prudence, strengthened financial stability while sustaining growth momentum.

Indias macroeconomic resilience in FY 2024–25 has laid a solid foundation for sustained long-term growth, underpinned by structural reforms, fiscal prudence and financial stability.

Outlook

Indias growth trajectory is expected to remain robust, with GDP projected to expand by 6.5% in FY 2025–26, driven by favourable monsoon conditions, sustained capital expenditure, resilient consumption and private investment revival. The Union Budget 2025–26, which introduced income tax relief for salaried individuals, is expected to bolster urban demand and discretionary spending. Retail inflation is projected to average 3.1%, staying below the RBIs target for most of the year before rising marginally in Q4.

Despite global trade uncertainties and tariff-related risks, Indias robust macroeconomic buffers, structural reforms and strategic emphasis on green energy, advanced manufacturing, infrastructure expansion and financial sector reforms are expected to sustain growth momentum and strengthen its position in global value chains. With strong fundamentals, policy continuity and reform-driven resilience, the economy is well-placed to navigate global headwinds. Looking ahead, India is firmly on track to become a USD 5 trillion economy and the worlds third-largest by FY 2028.

Overview of the Global and Indian Electricity Transmission Sector

Global Electricity Transmission Sector

The electricity demand is expected to grow globally majorly driven by the thriving wind, solar, natural gas-fired generation, and nuclear sectors. The demand is also expected to come from residential, commercial, and industrial activities and the rising electric vehicle growth.

Transmission lines are high-voltage power lines that distribute electricity over a long distance from big power plants to smaller power distribution lines for use at the local level. The increasing electricity demand in the world, especially the need to integrate renewable energy into the main grid line is projected to drive the transmission sector globally. The transmission sector has grown at a CAGR of 8% in CY19 at Mn 78,736 USD to Mn 1,05,903 USD in CY23.

Future Market Trends and Key Investment Drivers

The global transmission line market is poised for a transformative shift as the power generation sector is moving towards more sustainable and energy-efficient energy sources. The cross-border transmission lines and multilateral power trade around the world especially in ASEAN countries are expected to attract investments in the sector and grow the sector.

The market size consists of the entire supply chain of the power transmission sector is expected to grow at a CAGR of 6% from Mn 1,12,290 USD in CY24 to Mn 1,43,467 USD in CY28.

The electricity transmission market is currently undergoing a major change with countries in pursuit of better efficiencies and more suitability for integrating renewable energy. Several countries are upgrading their transmission lines to higher voltages to reduce transmission losses. Whereas technological changes and upgrades are being made to make the transmission systems more stable against the intermittent nature of renewable energy sources.

Besides, the increased renewable power capacity has raised the need for countries to interconnect their transmission systems in order to balance generation and demand through the export and import of electricity. This has pushed the construction of higher-capacity interconnection lines.

Further, China and the US are the top two countries in terms of transmission length. Transmission lines are upgraded with advanced technologies in developed countries, given their universal access to electricity, contributing to the transmission sector growth. Whereas in developing countries, the growth is brought about by the expansion of grids to provide electricity to all parts.

Transmission Network in India

The transmission network in India operates at different voltages to cater to different needs in the industry. The different voltage levels include Extra High Voltage (EHV), High Voltage, Medium Voltage, and Low Voltage.

The following table shows the distribution of the voltage lines:

Distribution of Voltage Lines

Further, Indias power transmission system has expanded at a significant pace driven by growing demand, the governments focus on providing electricity in rural areas, and the need for connecting the generation stations including integration of RE sources from the RE-rich states. In addition, with the implementation of two Central Sector Schemes namely, the North Eastern Regional Power System Improvement Project (NERPSIP) and Comprehensive Scheme of Transmission & Distribution System in Arunachal Pradesh & Sikkim, the transmission and distribution infrastructure of North Eastern states are being strengthened.

Moreover, the transmission line network grew at a CAGR of approximately 3% to 4,85,544 CKm as of March 2024 from 4,13,407 CKm as of March 2019. During FY24, 14,203 CKm of transmission lines were added to the total network. The transmission line network stood at 4,87,587 CKm as of July 2024. Whereas the transformation line capacity is at 12,65,700 MVA as of July 2024.

Overview of Global Renewable Energy

Global Power Sector

According to IEA, Renewable electricity capacity additions achieved an estimated 507 GW in 2023, marking an increase of nearly 50% compared to the previous year, 2022. The substantial growth is attributed to ongoing policy support in over 130 countries, prompting a significant shift in the global growth trend. The global acceleration in 2023 was primarily fuelled by the year-on-year expansion of Chinas thriving market for solar PV (+116%) and wind (+66%). The trend of increasing renewable power capacity additions is expected to persist over the next five years, with solar PV and wind collectively representing a record 96% of the total. This dominance is due to their lower generation costs compared to both fossil and non-fossil alternatives in most countries, coupled with sustained policy backing.

Solar PV capacity, encompassing both large utility-scale and small distributed systems, constitutes two-thirds of the anticipated growth in global renewable capacity for the current year. Solar PV and wind installed capacity constitute to more than 90% of the total renewable energy installed capacity. The installed capacity of renewable energy is expected to reach 11,000 GW by 2030 under COP28 targets.

Renewable Energy in India

Overview

There has been a significant shift globally in the generation capacity mix due to the growing concerns towards the environment and climate change. India is an active participant and has taken initiatives towards sustainable development and cleaner environment including significant additions of renewable energy generation capacity.

As per REN21 Renewables 2022 Global Status Report, India currently ranks 4th globally in total renewable energy installed capacity, wind power capacity and solar power capacity with generation from non-fossil fuel sources being 43% of the total installed generation capacity in 2024. The total potential of renewable power in India is estimated to be 1,639 GW as compared to installed capacity of 191 GW as on March 2024. The installed capacity of renewable energy has grown by 123 GW over FY19-FY24, implying a CAGR of around 9%.

Global HVDC and FACTS Market

Overview

High Voltage Direct Current (HVDC) and Flexible AC Transmission Systems (FACTS) are both power transmission systems and methods for optimizing transmission performance. HVDC uses direct current for the transmission of bulk power over long distances. HVDC lines are less expensive and provide less loss of DC energy through long distances as compared to AC transmission. It interconnects the networks with different frequencies and characteristics. HVDC lines increase the efficiency of transmission lines due to which power is rapidly transferred. They are majorly used in the transmission of renewable energy.

Advantages of HVDC Transmission:

Fewer conductors and insulators are required, reducing the system cost

Requires less phase-to-phase and ground-to-ground clearance

Lesser corona loss as compared to HVAC transmission lines of similar power

Power loss is reduced with DC because fewer numbers of lines are required for power transmission

Due to the absence of frequency in the HVDC line, losses like skin effect and proximity effect do not occur in the system

FACTS are used to control the transmission line power flow, voltage control, transient stability improvement, and oscillation damping. They are divided into three types, shunt compensation devices, series compensation devices, and combined series and shunt compensation devices.

Further, FACTS are static power-electronic devices installed in AC transmission networks to increase power transfer capability. Also, these devices are employed for congestion management and loss optimization.

The increasing number of decentralized renewables power feeds makes it difficult to ensure reliable & stable grid operation. Therefore, FACTS are used to increase the reliability of AC grids, ensuring stability, and boosting transmission efficiency. With the help of these high voltage fluctuations, power failures can be prevented, network assets can be optimally utilized, and load-induced disturbances can be mitigated.

The installation of HVDC and FACTS systems is increasing at a rapid pace around the world, including in Europe, North and South America, and China. Another factor attributed to this accelerating trend, alongside the increasing renewable energy capacity, the thriving cross-regional electricity trading, and the rising demand for a more reliable electricity supply, is the economic feasibility of using HVDC to strengthen grid connections. The market also expects to witness 52% of the HVDC transmission capacity originating from Asia.

The global market for HVDC and FACTS has grown at a CAGR OF 11% from Mn 10,162 USD in FY19 to Mn 13,217 USD in FY23.

Owing to increase in global adoption of renewable energy, the HVDC and FACTS market globally is expected to grow at a CAGR of 75-80% by CY28. This large growth is expected on the basis of projects approved all over the world and the back log in the supply of HVDC and FACTs globally.

HVDC and FACTS Market in India

High Voltage Direct Current (HVDC) Transmission has revolutionized the existing power system. The biggest advantage is the ease of long-distance and bulk power transmission, it has facilitated the transmission of electricity from power-rich states to power-deficit states, which coincidentally happen to be economically poor and economically rich respectively. There are currently five operational HVDC links in India namely Rihand-Dadri, Ballia-Bhiwadi, Chandrapur-Padge, Talcher-Kolar, and Mundra-Mohindergarh. Furthermore, the Biswanath-Agra link is commissioned.

In India, the first FACTS device installed in India is Thyristor Controlled Series Capacitor (TCSC) with Fixed Series Compensation (FSC) at 400 kV transmission line between Kanpur (U.P) and Ballabgarh (Haryana) in the Northern Grid.

Some more existing FACTS projects working successfully in India are:

Ranchi-Sipat 400 kV D/C, 376 Km transmission line with 40% FSC at Ranchi end

Raipur-Rourkela 400 kV, D/C, 412 Km transmission line with FSC-TCSC installed at Raipur end

FSC-TCSC installed at Kalpakam-Khammam 400 kV, D/C, 364 Km transmission line in Andhra Pradesh

The HVDC and FACTS market in India has grown at a CAGR of 7% from 576 Mn USD in CY19 to 743 Mn USD in CY23.

Source: Maia Research, CareEdge Research, Industry Sources

Note- The quantum of the HVDC transmission projects announced far exceeds the forecasted trajectory. India has planned HVDC projects with a current investment of Rs 76,000 cr. With the tendered orders an additional of Rs 30,000 to 40,000 cr. Is estimated to being added in the next 4 to 5 years. The estimated projects awarded in the market is sizeable and if executed and operationalised will result in addition to the market size of the industry in the medium to long term.

STATCOM

Overview

STATCOM stands for Static Synchronous Compensator. It is a power electronic device type used in electricity grids to regulate voltage, improve power quality, and enhance grid stability. A STATCOM operates by generating or absorbing reactive power to maintain the voltage within acceptable limits, especially during transient conditions or grid fluctuations. This helps improve the overall efficiency and reliability of the electrical system.

STATCOM (Static Synchronous Compensator) finds various applications in electrical power systems to enhance grid stability, improve power quality, and support voltage regulation. Some common applications of STATCOM include:

Voltage Regulation: STATCOMs are used to regulate voltage levels in transmission and distribution networks. By injecting or absorbing reactive power, STATCOMs help maintain the voltage within acceptable limits, ensuring a stable operation of electrical equipment and systems.

Power Factor Correction: STATCOMs can be employed to correct power factor issues in industrial and commercial facilities. By supplying or absorbing reactive power as needed, STATCOMs help improve power factor, thereby optimizing the efficiency of power distribution systems.

Grid Stability Enhancement: STATCOMs play a crucial role in enhancing the stability of power grids, especially during transient events or disturbances. By providing rapid and precise reactive power support, STATCOMs help dampen voltage fluctuations and stabilize grid operation, preventing voltage collapses and blackouts.

Transmission Line Compensation: STATCOMs can be installed at strategic locations along transmission lines to compensate for voltage drops, line losses, and reactive power demand. This helps optimize power transfer capacity, reduce transmission losses, and enhance overall grid efficiency.

Industrial Applications:

STATCOMs are utilized in various industrial applications to improve power quality, stabilize voltage levels, and mitigate harmonics. They are commonly deployed in industries with sensitive equipment, such as manufacturing plants, data centres, and semiconductor facilities, to ensure reliable & stable power supply.

Renewable Energy Integration: STATCOMs are increasingly used in renewable energy systems, such as wind farms and solar power plants, to mitigate voltage fluctuations and grid integration challenges. By providing reactive power support, STATCOMs facilitate a smooth integration of variable renewable energy sources into the grid.

Global STATCOM Market Size

The integration of renewable energy sources into the power grid presents challenges related to voltage fluctuations and intermittent power generation. Also, the rising demand for electricity worldwide calls for grid stability and power quality. In this regard, STATCOM solutions help stabilize the grid and help with the seamless integration of renewable energy in the main power grid. Similarly, governments worldwide are implementing regulations and policies to promote clean energy generation and grid stability. Accordingly, the market for STATCOM technologies is expected to gain more traction in the coming years.

Furthermore, research and development efforts are ongoing to improve the ability of STATCOMs, resulting in improved efficiency, reliability, and cost-effectiveness. The market for STATCOMs is geographically segmented into regions such as North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. Asia Pacific is anticipated to dominate the global STATCOM market, owing to rapid industrialization, urbanization, and infrastructure development initiatives in countries like China, India, and South Korea.

The global STATCOM market has grown at a CAGR of 5% from 2019 to 2023 to reach Mn 742 USD from Mn 617 USD in 2019.

Moreover, rapid industrialization & urbanization and a rising population are expected to substantially raise power consumption. This will further necessitate robust power transmission and distribution systems. Such factors alongside the global shift to sustainable energy sources are expected to drive the STATCOM market globally.

The global STATCOM market is expected to grow at a CAGR of 12% from Mn 792 USD in 2024 to Mn 1,246 USD in 2028.

Indian STATCOM Market Size

The Indian STATCOM market has been witnessing steady growth, propelled by rising investments in renewable energy integration, grid modernization projects, and infrastructure development initiatives. The market for STATCOM has grown at a CAGR of 6% from Mn 36 USD in 2019 to Mn 45 USD in 2023.

The growth of the Indian STATCOM market is primarily driven by growing concerns regarding grid stability and power quality, increasing renewable energy penetration, rising demand for efficient power transmission and distribution systems, and government initiatives promoting clean energy and sustainable development. The domestic market for STATCOM and the pent-up demand from exports project about 35-40% CAGR for this product.

Furthermore, the growing use of STATCOM in high voltage direct systems and its adoption in renewable energy industries for voltage stability electric utility applications are expected to drive the Indian STATCOM market. This will be supplemented by the high demand for STATCOM from the expanding industrial sector and the rising use of STATCOM in photovoltaic generation.

Moreover, the Indian government has been implementing various policies and initiatives to promote the adoption of STATCOMs and other FACTS (Flexible Alternating Current Transmission Systems) solutions in the country. For instance, initiatives such as the Green Energy Corridor project, Smart Grid Mission, and UDAY (Ujwal DISCOM Assurance Yojana) scheme aim to modernize the power sector and enhance grid reliability and stability.

The Indian STATCOM market size is expected to grow at a CAGR of about 18% from Mn 53 USD in 2024 to Mn 103 USD in 2028.

Global High Voltage Products

Overview

High-voltage power is AC (alternating current) power with a voltage exceeding 1000V or 1500V DC (direct current) in distribution lines (International Electrotechnical Commission standard). High-voltage products are a series of key products that ensure safe, reliable, and efficient power transmission under high voltage, such as High Voltage Special Power Transformers, High Voltage Reactors, and others. These products play a crucial role in various industries, including power generation, transmission, distribution, and industrial applications.

Different Types of High Voltage Products

Types	Description
High-Voltage Special Power Transformers	High-voltage transformers convert voltages from one level or phase configuration to another, usually from higher to lower. They can include features for electrical isolation, power distribution, and control & instrumentation applications. The transformer design is based on the principle of magnetic induction between coils to convert voltage and/or current levels.
High-Voltage Reactors	A high-voltage reactor is a coil wired in series between two points in a power system to minimize inrush current, voltage notching effects, and voltage spikes.
	Reactors may be tapped so that the voltage across them can be changed to compensate for a change in the load that the motor is starting.
High-Voltage Breaker Products	High-voltage circuit breakers are mechanical switching devices which connect and break current circuits (operating currents and fault currents) and carry the nominal current in closed position.
Others	Other high-voltage products include capacitors, combined electrical appliances, transformers, lightning arresters, coupling capacitors, transmission lines, power cables, grounding devices, generators, condensers, electric motors, closed busbars, thyristors, etc.

The global high voltage products value grew at a CAGR of 5% in the period from 2019-2023. The industry grew from USD 43,756 million in 2019 to USD 52,314 million in 2023. In 2023, high-voltage special power transformers had the highest product market share at 33.8% followed by high-voltage switchgear, high-voltage reactors, high-voltage breakers, and others at 21.2%, 8.7%, 5.0%, and 31.3%, respectively. Whereas the utility market by application contributes the largest share at 60.1% followed by industrial, commercial, and others at 19.2%,10.8%, and 9.9%, respectively, as of 2023 the growth is determined by energy requirements and governments shift towards renewable energy which has resulted in development of transmission grids.

The global high voltage products value is expected to grow at a CAGR of 7% in the period from 2023-2028. The industry is expected to grow from USD 52,314 million in 2023 to USD 71,871 million in 2028. In 2028, high-voltage special power transformers will contribute around 35.3% of the market share followed by high-voltage switchgear, high-voltage reactors, high-voltage breakers, and others at 21.2%, 8.2%, 4.8%, and 30.4%, respectively. Whereas the utility market by application will continue to contribute the largest share at 60.3% followed by Industrial, Commercial and Others at 18.6%,11.1% and 10.1% respectively as of 2028. The governments stance on Net-Zero carbon has resulted in the focus from thermal energy to renewable energy which will lead to an increase in transmission grids and high voltage product requirements.

Indian High-Voltage Products Market

The high-voltage products market in India encompasses a broad spectrum of electrical equipment designed to handle and control high levels of voltage in various applications across the country. The Indian high-voltage products value grew at a CAGR of 6% in the period from 2019-2023. The industry grew from USD 2,850 million in 2019 to USD 3,558 million in 2023. In 2023, high-voltage special power transformers had the highest product market share at 37.3% followed by high-voltage switchgear, high-voltage reactors, high-voltage breakers, and others at 25.1%, 6.9%, 4.5%, and 26.2% respectively. The utility market by application contributes the largest share at 62.9% followed by industrial, commercial, and others at 21.5%, 7.1%, and 8.5%, respectively as of 2023. India has ambitious targets for renewable energy deployment, including solar, wind, and hydroelectric power. India is investing heavily in infrastructure projects to modernize its power transmission and distribution networks, improve grid reliability, and meet the growing energy demand. Initiatives such as the Green Energy Corridors, Smart Cities Mission, and Rural Electrification Program drive the demand for high-voltage products across the country.

Global Power Quality Products Market

Overview

Power quality is the quality of electric energy in the power system. The main indicators to measure power quality are voltage, frequency, and waveform. Deviations in voltage, current, or frequency that cause electrical equipment to malfunction or not work properly are defined as power quality problems. Power quality products are used to eliminate power quality problems and extend the operating life of electrical systems.

Types	Description
Harmonic Filters	Harmonic filters are series or parallel resonant circuits designed to shunt or block harmonic currents.
	They reduce the harmonic currents flowing in the power system from the source, and thereby, reduce the harmonic voltage distortion in the system.
Static Var Compensator (SVC)	A static VAR compensator (SVC) is a set of electrical devices for providing fast-acting reactive power on high-voltage electricity transmission networks. SVCs can regulate voltage, power factor, and harmonics and stabilize the system.
Static Synchronous Compensator (STATCOM)	A Static synchronous Compensator (STATCOM) is a fast-acting device capable of providing or absorbing reactive current, thereby regulating the voltage at the point of connection to a power grid. It is categorized under Flexible AC transmission system (FACTS) devices. The technology is based on VSCs with semi-conductor valves in a modular multi-level configuration.
Others	Other Power Quality Products include output filters and LCL filters and so on. An output filter helps approximate the ideal waveform by blocking undesirable ripple voltages and currents from reaching the load. LCL filter is a type of filter used in power electronics to reduce harmonic distortion and improve the performance of power converters. The acronym LCL stands for the inductance (L), capacitance (C), and inductance (L) components that make up the filter.

The global power quality products market grew at a CAGR of 6% in the period from 2019-2023. The industry grew from USD 9,305 million in 2019 to USD 11,549 million in 2023. In 2023, capacitor banks had the highest product market share at 31.5% followed by static var compensator (SVC), harmonic filters, static synchronous (STATCOM), and others at 16.9%, 11.9%, 6.4%, and 33.3%, respectively. Whereas the public utility market by application contributes the largest share at 46.5% followed by industrial and others at 28.1% and 25.4%, respectively, as of 2023. The power quality products market experienced significant growth due to the increasing importance of maintaining a stable, reliable, and high-quality electrical power supply.

The global power quality products market is expected to grow at a CAGR of 8% in the period from 2023-2028. The industry is expected to grow from USD 11,549 million in 2023 to USD 16,718 million in 2028. In 2028, capacitor banks will contribute around 31.5% of the market share followed by static var compensator (SVC), harmonic filters, static synchronous (STATCOM), and others at 17.0%, 12.5%, 6.1%, and 32.8%, respectively. Whereas the public utility market by application will continue to contribute the largest share at 46.7% followed by industrial and others at 27.4% and 25.9%, respectively, as of 2028 driven by several factors, including the increasing reliance on sensitive electronic equipment, the growing awareness of the importance of power quality, and the expansion of renewable energy integration and electrification initiatives.

Indian Power Quality Products Market

The power quality products market in India has witnessed significant growth in recent years, driven by ambitious targets for renewable energy deployment, including solar, wind, and hydroelectric power. The Indian power quality products market grew at a CAGR of 7% in the period from 2019-2023. The industry grew from USD 609 million in 2019 to USD 798 million in 2023. In 2023, capacitor banks had the highest product market share at 28.6% followed by harmonic filters, static var compensator (SVC), static synchronous (STATCOM), and others at 18.5%, 13.3%, 5.7%, and 33.9%, respectively. Whereas the public utility market by application contributes the largest share at 46.1% followed by industrial and others at 31.3% and 22.7%, respectively, as of 2023. Indian Power Quality Products Market

About Quality Power Electricals Equipment Ltd

Quality Power is an Indian player serving global clients in critical energy transition equipments and power technologies. The Company provides high voltage electrical equipment and solutions for electrical grid connectivity and energy transition. Quality Power is a technology-driven company specializing in the provision of power products and solutions across power generation, transmission, distribution, and automation sectors. Besides, the Company offers equipment and solutions tailored for emerging applications such as large-scale renewables

The Companys manufacturing facilities adhere to the quality and sustainability standards required by its global conglomerate clientele, including those listed on the Fortune 500. Additionally, the Companys Test & Research Lab in Sangli holds ISO 17025 accreditation from the National Accreditation Board for Testing and Calibration Laboratories (NABL), certifying it as an independent test laboratory that complies with both Indian and international standards for systems up to 765kV.

Quality Power is among the few global manufacturers of critical high voltage equipment for High Voltage Direct Current (HVDC) and Flexible AC Transmission Systems (FACTS) networks. These equipments and networks form key components for energy transition from renewable sources to traditional power gridsWith over two decades of experience in the energy transition space, the Compaleany provides an extensive range of products crucial for effective power transmission and advanced power automation. The Companys offerings include reactors, transformers, line traps, instrument transformers, capacitor banks, converters, harmonic filters and reactive power compensation systems. Additionally, the Companys grid interconnection solutions feature technologies such as STATCOM and static var compensator systems ("SVC"). The Companys domestic and global footprint allows it to cater to both Indian as well as global customer base

HVDC technology is transforming the landscape of electricity transmission by enabling efficient, long-distance power transfer with markedly reduced energy losses. This advancement is crucial for integrating renewable energy sources from remote locations, such as offshore wind farms and solar plants in remote regions, into urban areas. FACTS devices, including Static Synchronous Compensators (STATCOM), are pivotal in ensuring grid stability and reliability. They manage fluctuations from variable renewable energy sources through dynamic voltage regulation and reactive power compensation. The adoption of HVDC and STATCOM technologies is vital for the green energy transition, as they facilitate the efficient and stable integration of renewables into the power grid.

Quality Powers portfolio of high voltage products and solutions is critical for advancing and modernizing electrical networks. The Companys technologies are designed to enhance grid reliability and performance by providing critical support for power grid management and overall network stability. Engineered to meet the demanding requirements of contemporary electrical infrastructure, these products ensure optimal efficiency and resilience. The Companys high voltage solutions helps to maintain and improve network performance, offering advanced capabilities to address the complexities of modern energy systems and assist operators in effectively managing power quality and operational reliability. The Companys product portfolio contributes in advancing decarbonization efforts, sustainability, and green energy initiatives. The Company offering a range of technology-driven products, comprehensive system solutions, and professional services tailored for the power sector. Since its inception in 2001, the Companys operations spans across multiple key areas, including (i) power transmission, providing effective transfer of electricity over distances, (ii) power distribution, ensuring the delivery of electricity to end users, and (iii) power automation, integrating advanced technologies for efficient power management. The Company also specializes in grid interconnection equipment, which addresses infrastructure and devices needed to connect multiple power grids or electrical systems. This equipment is crucial for facilitating the smooth transfer of energy between various stages: from generation to transmission, and from transmission to distribution, ensuring that energy flows throughout the power system, promoting integration and consistent operation.

The Companys manufacturing operations in India are spread across two locations, including Sangli, Maharashtra and Aluva (Cochin), Kerala. As part of its global expansion, the Company acquired Endoks Enerji Degitim Sistemleri Lth Lhr Sti ("Endoks") in 2011, which has design, operation, assembly and project management & delivery facilities in Ankara, Turkey.

The Companys manufacturing facilities are accredited as ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 by TUV India Private Limited. Further, the Company complies with ISO standards for customer satisfaction, energy management, occupationalhealthandsafety,environmentalmanagement, quality management, and information security, reflecting its commitment in diverse operational areas. The Company has been awarded the status as a ‘One Star Export House in accordance with the provisions of the Foreign Trade Policy, 2023 by the Directorate General of Foreign Trade, Ministry of Commerce & Industry.

To grow and expand its business, the Company evaluate targets for acquisitions and seek opportunities to acquire businesses which complement its product offerings, strengthen or establish our presence in its targeted domestic and international markets or enhances the knowledge base and know-how and provide synergy to its existing businesses and operations.

Accordingly, the Company acquired 522,750 equity shares from the promoters of Mehru Electrical and Mechanical Engineers Private Limited for a total cash consideration of rs 1200.oo millions on March 6th,2025.

Threats and Challenges to the Company

Project Approval and Permitting Delays

Navigating the complex and government approvals processes can delay project timelines, Frequent regulatory changes can create uncertainty and hinder long-term planning with delays in approvals and adapting to new regulations can result in increased costs and missed opportunities. Securing environmental clearances can be particularly challenging, involving extensive documentation and assessments. Additionally, projects may encounter opposition from environmental groups, leading to further delays and heightened scrutiny.

Lack of Skilled Talent

Designing and engineering advanced electrical equipment require highly skilled engineers and designers. The need for highly skilled engineers and designers and retaining top talent can create a talent acquisition challenge with Rapid changes in technology necessitate continuous learning and adaptation, which can be resource-intensive and meeting specific customer requirements with customized solutions increases complexity and cost.

Grid Compatibility and Interoperability

Adhering to various national and international standards for electrical equipment can be complex and expensive, as obtaining the necessary certifications and approvals is often a lengthy and costly process. Ensuring new equipment is compatible with existing grid infrastructure presents significant technical challenges, leading to additional costs for modifying existing systems to accommodate new equipment.

High Initial Investment

Electrical equipment manufacturing requires significant upfront capital for setting up manufacturing units, procuring raw materials, and implementing advanced technologies. Securing new funding can be a challenging task for scaling up due to long payback period and rapid technological change in power sector.

Maintenance, Reliability, and Safety

Equipment failures or maintenance downtime can cause significant financial losses and disrupt operations. Frequent downtimes can harm the companys reputation for reliability. Meeting strict safety standards to prevent accidents is resource-intensive and failures can lead to legal issues, fines, and compensation claims. Consistently maintaining high reliability levels for customer satisfaction can be challenging, especially in harsh or variable environmental conditions.

Category-wise break-up of the revenue

	FY 2025			FY 2024		FY 2023
Particulars	Revenue (Rs in million)	As a % of total revenue from operations	Revenue (Rs in million)		As a % of total revenue from operations	Revenue (Rs in million)	As a % of total revenue from operations
Power Products	1756.21	52.17	1243.32		41.19	849.01	33.52
Power Quality Equipment	1551.18	46.08	1,678.33		55.61	1,618.10	63.89
Others	59.07	1.75	96.55		3.20	65.39	2.58
Total	3366.46	100.00	3018.20		100.00	2,532.50	100.00

KEY FINANCIAL & OPERATIONAL PERFORMANCE INDICATORS

The Company is dedicated to driving initiatives that propel performance, with a strong focus on risk management, internal controls and cost optimization through rigorous operational and financial practices. During FY 2024-25, the Company performance - consolidated had achieved an increase of 18.32% on total revenue with an increase of profit before tax and profit for the year of 77.47 % and 80.52 % respectively over the previous FY. This was possible mainly due to improved order execution, effective cost control measures and improved product mix. Also, during the financial year, the companys debt decreased considerably, and its cash and cash equivalent increased from Rs. 473.09 m to Rs. 1808.88 m.

The Company, at its IPO Committee meeting held on 20th February 2025 approved allotment of 2,02,04,600 equity shares (a fresh issue of 52,94,100 equity shares and offer for sale of 1,49,10,500 equity shares) of Rs.10 each pursuant to Initial Public Offer at a securities premium of Rs. 415 per equity share under fresh issue. The Equity Shares of the Company were listed on BSE Limited ("BSE") and National Stock Exchange of India limited ("NSE") on 24th February 2025.

On 6th March 2025, the Company acquired 51% of the equity shares of Mehru Electrical & Mechanical Engineers Private Limited, thereby obtaining control over it. The acquisition was made for a total consideration of H1,200 Million, funded by the IPO proceeds. An advance of H30 Million was paid on 23rd May 2024, and the remaining H1170 Million was paid on 6th March 2025

Sr. No. Particulars	March 31, 2025	March 31, 2024
1 Current Ratio	6.23	1.39
2 Debt-Equity Ratio	0.02	0.23
3 Debt Service Coverage Ratio	20.53	13.01
4 Return on Equity Ratio	0.12	0.21
5 Inventory Turnover Ratio	9.79	12.89
6 Trade Receivables Turnover Ratio	5.34	6.77
7 Trade Payables Turnover Ratio	5.54	5.34
8 Net Capital Turnover Ratio	1.00	7.52
9 Net Profit Ratio	0.20	0.14
10 Return on Capital Employed	16.75%	23.87%

Key financial ratios

Particulars	FY 2025	FY 2024
Total Revenue	1557.29	1,336,79
Profit before tax	394.44	237.10
Profit for the year	303.11	175.44
Net Worth	3330.61	940.91

B. Financial performance -Standalone

(Rs. in million)

Particulars	FY 2025	FY 2024
Total Revenue	3923.47	3315.92
Profit before tax	1122.63	632.57
Profit for the year	1001.49	554.76
Net Worth	5937.15	1903.2

The Companys Financial performance, both Consolidated and Standalone are:

A. Financial performance- Consolidated

(Rs. in million)

The major reason for significant variances for 25 % or more as follows :

Sr. No. Particulars	March 31, 2025
1 Current Ratio	i) Increase in Cash and Cash Equivalent due to proceeds from Initial Public Offer (IPO).
	ii) Reduction in Cash Credit.
2 Debt-Equity Ratio	An increase in share capital due to fresh issue of shares in IPO
3 Debt Service Coverage Ratio	Due to increase in EBITDA
4 Return on Equity Ratio	Due to increase in Share Capital due to Initial Public Offer (IPO)
5 Inventory Turnover Ratio	NA
6 Trade Receivables Turnover Ratio	NA
7 Trade Payables Turnover Ratio	NA
8 Net Capital Turnover Ratio	Due to increase in working capital & revenue
9 Net Profit Ratio	Due to increase in revenue
10 Return on Capital Employed	Due to increase in Share Capital due to Initial Public Offer (IPO)

Manufacturing facilities

Manufacturing Facilities and Expertise

Quality Power Group operates a robust network of manufacturing facilities across India and abroad, strategically located in Sangli (Maharashtra), Bhiwadi (NCR, Rajasthan), Aluva (Kerala), Chennai (Tamil Nadu), and Ankara (Turkey). Collectively, these plants form the backbone of the companys global delivery capability, enabling it to serve utilities, industrial customers, and OEMs across more than 100 countries. Each facility has been developed with a clear focus on advanced engineering, precision manufacturing, and compliance with international benchmarks, comparable to the best practices followed by global leaders such as Hitachi Energy and Siemens Energy.

The Groups facilities are certified to ISO 9001:2015 (Quality Management), ISO 14001:2015 (Environmental Management), and ISO 45001:2018 (Occupational Health and Safety Management), ensuring that every stage of production meets stringent global requirements. This integrated management system reflects Quality Powers long-standing commitment to operational excellence, sustainability, and workplace safety. Beyond certifications, the facilities are approved and routinely audited by leading regional and global utilities, underscoring the credibility of the Groups manufacturing systems and processes.

The product portfolio manufactured across these plants spans a wide spectrum of high-voltage and medium-voltage equipment. This includes reactors for HVDC and FACTS applications, shunt and line reactors, instrument transformers (CTs, PTs, CVTs, IVTs), special-purpose transformers, line traps, power quality solutions, and embedded automation systems. Each facility is equipped with fully owned, modern machinery and precision tooling, ensuring end-to-end control of quality and the flexibility to adapt to the unique technical requirements of global clients. The Group currently directly and contractually employs more than 1,500 highly qualified engineers, technicians, and indirect personnel, providing the expertise and scale needed to execute complex projects to demanding delivery schedules.

Quality Power places significant emphasis on testing and validation. In line with this, the Group operates multiple in-house test laboratories that provide full compliance verification to IEC, IEEE, and regional standards. The Sangli and Bhiwadi facilities house NABL-accredited laboratories, independently certified under ISO/IEC 17025. This accreditation allows the Group to function as an independent test centre, ensuring impartiality and reliability of results while reducing dependence on third-party testing. These laboratories are equipped to perform routine, type, and special tests up to the highest voltage levels, allowing Quality Power to deliver equipment with proven performance in the most demanding operating environments.

Human resources

Human Resources and Talent Development

Quality Power Group employs over 1,500 direct and indirect professionals across its global operations, including engineers, technologists, project managers, and skilled technicians. This workforce is central to the Groups ability to deliver complex high-voltage and medium-voltage solutions that meet the exacting standards of utilities and industrial clients worldwide.

The human resources strategy is focused on attracting, developing, and retaining talent aligned with the companys business objectives. Recruitment draws from leading engineering institutes and vocational programs as well as experienced professionals from the global energy industry. Once onboarded, employees participate in structured technical and managerial training covering transformer and reactor design, grid automation, embedded systems, and compliance with IEC, IEEE, and regional standards.

Continuous learning is a cornerstone of the HR framework. Training programs are delivered through in-house centres, partnerships with academic institutions, and global project exposure. Employees are encouraged to pursue professional certifications, ensuring their skills evolve with industry technologies and regulatory requirements.

Workplace culture emphasizes safety, integrity, and collaboration. All facilities operate under ISO 45001:2018, with rigorous occupational health and safety protocols embedded in daily practice. Diversity and inclusion are also key priorities, with initiatives to expand the role of women professionals across technical and leadership functions.

Career progression is supported by competency frameworks, mentorship, and structured engagement programs. Recognition and reward systems emphasize both performance and adherence to organizational values. Employees also benefit from international project assignments, which provide cross-cultural exposure and broaden technical expertise.

Through this combination of talent development, global exposure, and a strong culture of safety and integrity, Quality Power ensures its human resources remain a strategic driver of growth and innovation in the evolving global energy landscape.

Risk and Internal Controls

A strong internal control framework has been integral to the Companys operations and corporate governance. This framework ensures the reliability of financial information, compliance with laws and regulations, and optimization of operations. It involves documenting and evaluation unit and entity level controls through established policies and procedures to identify significant gaps and define actions for improvements. Additionally, theres a formal system for periodic monitoring and reporting of internal control and assessment.

In accordance with the Companies Act 2013, a thorough evaluation of internal controls over financial reporting was conducted during the year. Management assessed their design and effectiveness, concluding that the controls were operating effectively as on March 31st, 2025. Furthermore, as part of statutory audit, the statutory auditors confirmed that the company has an adequate internal financial control system over financial reporting, with all controls operating effectively as on March 31, 2025. Internal auditors keep a close check on these controls and regularly assess their effectiveness. The Audit Committee reviews the audit reports and investigates any issues found. Key findings are shared with the management team, who promptly take the necessary steps to resolve any issues.

Company outlook

India is set to maintain its position as the worlds fastest growing major economy over next two years. Indias economy is expected to grow between 6.3 to 6.8% in FY 2025-26.

Key sectors like infrastructure, manufacturing and renewable energy are seeing significant momentum with India targeting 500 GW of renewable energy capacity by 2030. With growing demand for electric vehicle adoption, railway electrification and energy independence are further enhancing to the positive outlook. With more impetus on "Make in India ", "Aatmanirbhar Bharat", the PLI scheme and Digital India is boosting industrial growth and facilitating foreign investments. What is accelerating Indias push to sustain higher growth and become a global economic leader in years to come is basically due to friendly cum initiative taking policies, increased investors confidence and a constant macro-economic environment.

Looking ahead, the Companys focus remains focused on enhancing its profitability, operating with consistency and making sensible investments. In the next few quarters, the Company aims to expand its operations in alignment with the growing pipeline of opportunities. The Company continues to invest in its future by strengthening its R&D capabilities and building a strong team of technical experts to support upcoming growth. The ongoing project at the Sangli facility is set to become one of the largest coil factories globally.

CAUTIONARY STATEMENT

This management discussion and analysis statement contains what could be regarded as forward-looking statements and information. These statements include forecasts and estimate as well as the assumptions on which they are based, statements related to objectives and expectations concerning future operations, products and services or future performance. The readers hereby caution and advised that these forward-looking statements are subject to numerous risks and uncertainties that are difficult to foresee, and actual outcomes might differ significantly.