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Supreme Power
Our verdict on Supreme Power isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
Management has successfully shifted the revenue mix, with 'Others' (Private) accounting for 73.65% of FY25 revenue, effectively reducing government dependency. (1 met across 1 tracked commitment)
“Yes, we are expecting the same, but we want to restrict below 50% -- the government exposure below 50%.”
Management has revised the execution expectation for the now-larger order book (INR 235 Cr) to 50-60% for the current financial year. (1 revised, 1 met, 1 in progress across 3 tracked commitments)
“Vee Rajmohan: Yes, definitely. I think we should cross INR200 crores.”
Consolidated EBITDA margin for H1 FY26 was 18.94%, slightly below the guided 19-20% range. Standalone margins for FY25 also showed a downward trend to 17.75%. (2 missed, 1 met across 3 tracked commitments)
“Vee Rajmohan: So, I think the margin will sustain. This 10% to 12% margin will be sustained.”
Management is working to expand its focus to local utilities beyond the state of Tamil Nadu. — target: Utilities beyond Tamil Nadu
“We are also working to expand our focus to local utilities beyond Tamil Nadu, which we believe will support more sustained growth.”
The company plans to introduce transformer refurbishment services at the new plant in a phased manner. — target: Refurbishment services launch
“And we have idea to do refurbishment work also. And in the new plant, it will be in a Phase 2 manner. Maybe after 6 months -- after 6 to 12 months, we will be able to do that.”
See the full cited Management analysis of Supreme Power
How durable is the business?
The company is actively expanding its footprint in Kerala, having secured L1 status (lowest bidder) for significant orders from the Kerala State Electricity Board (KSEB). (5 expanding)
“Kerala Electricity Board we are targeting... we have been approved in KSEB, Kerala State Electricity Board. And we have posted so many tenders and one tender it has opened and we were L1 on that for supply of 25 MVA.”
The new manufacturing facility is 70% complete and expected to be fully operational by December 2025, which will significantly boost revenue capacity to INR 500 crores. (5 expanding)
“Yes, before this December 2025, the full capex will complete 100%... And the top revenue of fully utilized plant will be around INR500 crores.”
The government sector has expanded significantly to 63% of the order book, driven by a landmark INR 60.9 crore order from NLC Limited. (1 expanding)
“Government is 63% and private is 37%. This includes the NLC order.”
The non-government (private) sector continues to be the dominant revenue driver, maintaining a high share of approximately 74% as the company focuses on solar and industrial segments. (5 expanding across 2 engines)
“Yes, yes 60% -- 60%, 65% is non-government. And going forward, we believe it will maintain.”
The company's moat is expanding through a massive capacity increase from 2,500 MVA to 9,000 MVA, with the new facility nearly complete (95%). (1 expanding)
“No, it is a new plant, whereas the existing plant is something around --17,000 square feet, whereas the new plant is like 140,000 square feet. So it's a huge investment”
See the full cited Business Model analysis of Supreme Power
Where does growth come from?
The company's total revenue capacity across both plants could reach as high as INR 700 crores once fully utilized, providing a long-term growth ceiling.
“See the new plant, the capacity -- full capacity, I think it can fetch up to INR600 crores to INR650 crores in the new plant. And here, we can go up to INR100 crores to INR110 crores in the existing plant. Yes. So all put together, maximum INR700 crores, we can go.”
The order book shows significant acceleration, growing from ₹116 Cr (consolidated) to ₹167.67 Cr in just two months, driven by a massive ₹51 Cr intake in Q4 FY25 alone. (5 accelerating across 5 signals, 4 leading indicators)
“SPEL is undergoing a transformative expansion to develop a state-of-the-art facility... Current Capacity: 2,500 MVA/year New Capacity: 9,000 MVA/year (increase of 6,500 MVA)... Investment: ₹95–100 Cr... Timeline: Operational by Approx Q4 FY26”
The solar segment is showing explosive growth, with Inverter Duty Transformer (IDT) sales increasing from 7% of revenue last year to 17-18% this year, and currently making up 40% of the order book. (4 accelerating across 4 signals)
“Inverter Duty Transformers (Solar Transformers): FY23: 3.82 Cr, FY24: 8.03 Cr, FY25: 25.49 Cr”
Consolidated total income for FY25 reached INR 149.54 crores, representing a 31.65% year-on-year increase, showing accelerating momentum compared to earlier 9-month figures. (4 accelerating, 1 new trend across 5 signals)
“Total Income: 9M FY26 ₹111.38 Cr vs 9M FY25 ₹89.98 Cr (23.78% Y-O-Y)”
The company is planning to launch a new service line for transformer refurbishment (repair and upgrading) within the next 6 to 12 months at their new facility.
“And we have idea to do refurbishment work also. And in the new plant, it will be in a Phase 2 manner. Maybe after 6 months -- after 6 to 12 months, we will be able to do that.”
See the full cited Future Growth analysis of Supreme Power
What could break the thesis?
The risk is intensifying as management explicitly stated the current workforce is insufficient for the upcoming capacity expansion. (5 intensifying, 2 high-severity)
“Top 10 Customers 94.91 [Cr] ... 65.55% [of revenue]”
The risk is intensifying slightly in the short term as management guides for a 1% to 1.5% drop in margins due to increased overheads and workforce expansion following the capex. (5 intensifying, 1 high-severity)
“Raw Material Expenses Q3 FY26 27.35 Q3 FY25 23.56”
The risk is STABLE. While ROCE is significantly lower than FY23 levels (58.52%), it has stabilized between FY24 (24.71%) and FY25 (23.84%). (5 stable, 1 high-severity)
“Investment: ₹95–100 Cr ... New Capacity: 9,000 MVA/year (increase of 6,500 MVA)”
The company faces delays in obtaining necessary environmental clearances for its new plant, which has already pushed back the timeline for full commercial invoicing. [REGULATORY]
“Yes, there was a delay because of the environmental clearance was delayed. So that was the reason we are not able to invoice.”
The risk is INTENSIFYING in the short term as government orders currently make up 63% of the order book, up from the previous strategy of shifting toward private. However, management aims to rebalance this to a 50-50 or 40-60 split to mitigate payment risks. (1 intensifying, 4 easing)
“To mitigate the risk of delayed payments from government clients, The company has strategically diversified its customer base, with 74% of FY25 revenue generated from private tenders.”
See the full cited Risk analysis of Supreme Power
Read the full thesis on Supreme Power
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