As long as there is electricity, we’ll need transformers, in my opinion. The likelihood of AI or any other tech replacing transformers is as high as the same replacing motors or turbines or boilers, or battery or any machinery that transforms energy from one form to another.
Smart transformers will be nothing but the same with sensors or other bells and whistles on them but role of transformers in electricity supply chain will remain the same unless scientists discover a new form of electricity which automatically controls itself.
Current capacity is clearly not enough given the order book of existing players and their current capacity utilization (in 90s). And per capita electricity consumption in India is still the lowest globally so directionally demand is going to explode as urbanization trend continues and Indians move up the consumption ladder.
Basic mechanism of transformers is simple and space has been quite small with a few players in it with limited scale of operations. So if this space starts expanding and become attractive to other players, given growth in power demand over several years, would current players like Voltamp, Techno Electric or Shilchar or TRIL be able to maintain their hefty valuations (all trading at 3-7x their historical P/E) amid increasing competitiveness?
That to me is the ultimate question one needs to ask.
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