Transrail Lighting Limited
About the Company
Transrail Lighting Limited (Transrail) is a leading Indian engineering, procurement, and construction (EPC) company specializing in power transmission and distribution (T&D) and the manufacturers of lattice structures, conductors, and monopoles. With a track record spanning over four decades, the company has been a trusted and longstanding partner in the sector. Its business is structured into four verticals such as power transmission and distribution (including substations), civil construction, poles and lighting, and railways. A noteworthy transformation happened in the company when the T&D business division of Gammon India Ltd was transferred into Transrail through a business transfer agreement in 2016. Transrail came out with an IPO in December, 2024, with an issue prise of Rs 432 per shares to raise Rs 830 crores.
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Transrail has strong presence in 58 countries, including Bangladesh, Kenya, Tanzania, Niger, Nigeria, Mali, Cameroon, Finland, Poland, and Nicaragua, among others. The company provides comprehensive EPC solutions for transmission and distribution lines in these regions. Additionally, the company extends its expertise to civil infrastructure projects, including bridges, tunnels, elevated roads, and cooling towers. In the poles and lighting segment, Transrail engages in manufacturing, supply, installation, and testing of monopoles and lighting structures. The company also plays a significant role in railway electrification by offering services like overhead electrification, signalling, earthworks, telecommunication and track linking.
Transrail has four advanced manufacturing sites situated in Vadodara, Gujarat; Deoli, Maharashtra; and two facilities in Silvassa, Dadra and Nagar Haveli. These facilities are strategically located to support its domestic and global projects, ensuring efficient supply chain management.
Strengths
Integrated Business Model: Transrail is one of the few players in the industry with integrated manufacturing facilities for lattice structures, conductors, and monopoles. The company’s state-of-the-art tower testing facility ensures that it to meet the highest quality standards. The company has a well-diversified business across four key verticals such as Power Transmission & Distribution (T&D), Civil Construction, Poles & Lighting and Railways. The company specialize in transmission lines, substations, underground cabling, and distribution networks, making us a dominant player in the sector. Among the Civil Construction segment, it focusses on niche and complex infrastructure projects, including bridges, cooling towers, tunnels, and elevated roads. Poles & Lighting segment includes a wide range of complex products, serving both urban and industrial applications. Additionally, Railways division provide railway electrification, traction substations, signalling, and telecommunication solutions, playing a crucial role in the modernization of railway networks.
Expanding Horizon: The company’s international business has shown remarkable growth, increasing from 38% in 2022 to 53% in 2023 and 59% in 2024. Currently, revenue from overseas contributes around 55% of the company’s total income. Company cautiously selecting the international orders. It carefully evaluates international projects, rejecting nearly 50% of bids based on funding sources, client credibility, and consultant quality. By working with multilateral funding agencies, it mitigates financial risks and ensure stable growth. Its international projects are largely backed by multilateral funding agencies, ensuring strong commercial payment security through letters of credit. While project execution may experience minor delays due to funding and right-of-way challenges, it has never incurred losses on any international project.
As part of its growth strategy following the IPO, Transrail have entered into the solar EPC business. The company recently secured first international order for an 80 MW ground-mount solar PV project, along with associated substations.
Superior Margins: Transrail predominantly remain a T&D company with 85% revenue share from this segment. However, it actively growing other segments, which now ensuring a 15% contribution from civil, railways, and poles divisions. Its profit margins are superior to its peers, driven by backward integration and a strategic bidding process.
Robust Financials: Transrail’s revenue for Q3 FY25 stood at Rs 1,358 crore, representing a significant 62% growth from Rs 837 crore in the same quarter of the previous year. This substantial increase was primarily driven by the company’s transmission and distribution (T&D) segment. Net Profit for the period registered at Rs 98 crores, marking a 108% YoY growth from Rs 44 crores. Revenue for the nine-month period ending 31 December 2024, stood at Rs 3,305 crores, up from Rs 2,6366 crores in the year ago.
Strong Balance Sheet: The company’s balance sheet is strong with long-term borrowing is minimal. However, its current overall borrowing cost stands at around 11%. This is expected to decrease with rating upgrades. Recently, after the IPO, CRISIL has upgraded the company’s rating, with long-term banking facilities now rated CRISIL A+ (Stable). With improved liquidity from the IPO funds and strong cashflow from internal accruals the company is well-positioned to reduce its debt costs, going forward.
Enhanced Capex : Transrail has earmarked Rs 327 crore for capital expenditure (Capex) over the next two years, with Rs 90 crore coming from IPO proceeds. The additional investment will be used to expand existing manufacturing units for conductors and poles and to develop a new tower manufacturing facility. The capex plan includes Rs 125 crore for brownfield expansion, Rs 80 crore for project execution, tools, and equipment, and Rs 115 crore for the new tower manufacturing unit. Work is already underway on expanding tower and conductor facilities, and the company plans to set up the new tower manufacturing unit within a year.
Hefty Order Backlog: Transrail’s order book is expanding rapidly, driven by its strong competitiveness and backward integration capabilities. Recently, the company secured new orders worth Rs 2,752 crore in the Transmission & Distribution (T&D) sector. With this, its year-to-date order inflows have exceeded Rs 10,300 crore, marking a 90% growth compared to the previous year. In addition to this, the company has potential orders worth Rs 3,400 crore in the pipeline, as it is the L1 bidder, that further strengthening its growth prospects.
Promising Outlook
The Government of India has a strong commitment to economic growth, particularly in the infrastructure sector. Its strategic focus on critical areas such as power, transmission & distribution (T&D), renewables, and urban infrastructure aligns seamlessly with Transrail’s growth ambitions, creating significant opportunities for expansion.
The company’s international projects typically have an execution period of 24 to 30 months, while domestic projects are completed within 18 to 24 months. With T&D contributing 90% of the total order book, Transrail continues to solidify its position as a leading player in this sector. This strong order pipeline provides clear revenue visibility for the next 2 to 3 years.
Transrail’s fully integrated manufacturing capabilities, spanning conductors, poles, and tower production—give it a distinct competitive edge, as not all competitors have similar integration. Thus, the company maintaining an EBITDA margin target of over 12.5%, which is much higher than the industry average.
The company reported revenue of Rs 4,100 crore in FY24 and are maintaining its guidance of 30% growth for FY25, targeting Rs 5,300 crore by March 2025. Looking ahead to FY26, management anticipate an additional 25% growth, bringing revenue to approximately Rs 6,600 crore.
India’s Transmission & Distribution (T&D) sector is growing rapidly, driven by major investments in green energy. According to the Central Electricity Authority’s (CEA) draft National Electricity Plan, India will need about Rs 4,75,000 crore by 2027 to upgrade its transmission network. This includes Rs 3,10,000 crore for interstate transmission and Rs Rs 1,60,000 crore for intrastate projects. Key projects, such as undersea cables to the Andaman & Nicobar Islands and an HVDC line connecting India with Sri Lanka, are also being considered. With strong demand, government support, and growing renewable energy integration, the future of India’s T&D sector looks promising, creating long-term growth opportunities for Transrail.
A strong and growing order book, along with sustained profitability, ensures steady cash generation for the company. With solid market fundamentals, robust financials, and a rising order pipeline, Transrail is well-positioned for long-term growth.
Risk Factors
Transrail, has large exposure to international business, which carry’s various risks, related to currency fluctuations, geopolitical uncertainties as well as country-specific risks. The company’s business is high working capital intensive due to the long project execution cycles of 2–3 years in the EPC sector. This may increase reliance on short-term borrowings, leading to higher interest costs.
The Power T&D business largely depends on government spending, as infrastructure development, grid expansion, and modernization projects are primarily driven by public sector investments and policy initiatives. Any decline in government spending, even due to changes in sectoral priorities, may impact the company’s order book position, in effect also profitability.
Sector: Capital Goods
Market Price: Rs. 498.35 as on today
FV: Rs 2/-
Stock Name: Transrail Lighting Ltd
BSE Code: 544317, NSE Code: TRANSRAILL
Market Cap.: Rs 6750 Cr
Book Value: Rs. 96
Segment: EPC – Power T&D
Incorporation: 2008
Headquarters: Bandra East Mumbai, Maharashtra
