Skipper newly rated 'Buy' at Systematix; 17% upside potential seen

Systematix Institutional Equities has initiated coverage on Skipper with a ‘Buy’ rating and a target price of ₹490 per share. Skipper is India’s largest manufacturer of transmission lines (TL) towers, with an installed capacity of 3,75,000 MTPA as of Q2FY26 end.

 

With an order book of ₹8,800 crore at the end of Q2FY26 (1.9x FY25 revenue) and order inflows expected to grow at 22 per cent compound annual growth rate (CAGR), Skipper’s revenue/Ebitda/PAT are estimated to grow at 20 per cent/24 per cent/34 per cent CAGR over FY25–28E. Ebitda refers to Earnings before interest, tax, depreciation and amortisation and PAT refers to profit after tax. 

 

Low-cost, integrated T&D player planning to double capacity

Skipper is among the top 10 transmission tower manufacturers globally and has built a strong cost advantage through high backward integration, sourcing nearly 90 per cent of its raw materials in-house. The company commands 15 per cent market share in the high voltage transmission tower segment. This integrated model supports structurally higher margins, as compared to peers, according to Systematix.

 

The company plans to nearly double its TL tower capacity to 0.6 million TPA by FY29 – roughly 2x its FY25 capacity – with a proposed capex of about ₹800 crore. This capacity ramp-up is aimed at catering to both domestic demand and a sharp scale-up in export orders, noted the brokerage.   ALSO READ | Lenskart: Emkay Global sees 6x revenue growth potential, initiates 'Buy'

₹9.15 trillion transmission capex to materially expand Skipper’s opportunity

According to the National Electricity Plan (NEP), India is expected to see transmission capex of ₹9.15 trillion over FY23–32, driven by the need to increase inter-regional transmission capacity from 119 GW to 168 GW. This implies additions of 200,000 ckm of transmission lines and 1,270 GVA of transformation capacity.

 

Within this, the share of 765kV assets is set to rise meaningfully – to 28 per cent of new TL additions (from 22 per cent in FY17–22) and to 45 per cent of new substations (from 26 per cent). As a dominant player in the 220kV-and-above segment, Skipper is well positioned to capture this move towards higher-voltage infrastructure and reap the benefits of a structurally larger addressable market, believes analysts.   ALSO READ | Antique prefers domestic-focused pharma firms; resumes coverage on 4 stocks

Export ambitions: Targeting 50 per cent of revenue from overseas markets

Skipper is already present in over 65 countries, with exports contributing about 21 per cent of total revenue in H1FY26 and 20 per cent of engineering revenue in Q2FY26. The company now aims to lift exports to around 50 per cent of total revenue over the next 3–4 years.

 

The strategy is to build a balanced mix, with 25 per cent of total revenue targeted from developed markets such as North America, Europe and Australia, and another 25 per cent from developing regions including the Middle East, Africa and Latin America. Export business is largely product-led (without Engineering, Procurement, and Construction (EPC) exposure), carries 100–200 basis points (bps) higher margins than domestic operations, and operates on similar working capital terms.

 

Backed by capacity expansion and deeper qualifications with utilities and EPC players in markets like the US and Canada, the brokerage expects Skipper to see a sharp improvement in export order inflows over FY26–28E, reinforcing its growth and margin profile

 

Disclaimer: View and outlook shared belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.