The artificial intelligence revolution is creating unprecedented demand for power infrastructure, with TD Power Systems emerging as a key beneficiary of this global transformation. As AI models require continuous operation in power-intensive data centres, the company's generator manufacturing capabilities are becoming increasingly critical to support this digital expansion.

Massive Market Opportunity Driven by AI Infrastructure

The global generator market presents a substantial growth opportunity, with projections showing expansion from $52 billion in 2025 to $73 billion by 2029. This translates to over ₹6 lakh crore market size, driven primarily by data centres, gas-based power generation, and clean energy applications.

According to the International Energy Agency, electricity usage by data centres has grown at 12% CAGR over five years, reaching 415 terawatt-hours. This figure is projected to more than double to 945 TWh by 2030, with data centre demand growing 4X faster than overall electricity consumption across other sectors.

Comprehensive Engineering Solutions Portfolio

TD Power Systems operates across multiple segments with a diversified product portfolio designed for critical power applications. The company manufactures generators ranging from 1 to 250 MVA, positioning itself as a global leader in this specialized space.

Generator Capabilities by Application

Beyond generators, the company manufactures electric motors including induction motors up to 20 MW, synchronous motors up to 50 MW, and traction motors up to 1,250 kW for railway applications. This diversification enables participation across multiple end markets including geothermal plants, marine systems, and specialized testing facilities.

Strategic Focus on High-Growth AI Infrastructure

For TD Power Systems, data centres and AI servers represent the most significant global growth driver, particularly in the US and Europe where the company generates 64-66% of its revenue. The mission-critical nature of AI infrastructure has made uninterrupted power supply non-negotiable.

Major technology companies including Meta, Alphabet, Microsoft, and Amazon have indicated continued increases in AI infrastructure spending through 2026. In the US alone, growing data centre demand is expected to add 100 GW to electricity demand by 2030.

Technology Evolution for Next-Generation Requirements

The company is evolving its technology to meet higher power requirements of modern server farms, moving into the 40-45 MW generator space with 2-pole generators designed for larger gas turbines and engines. These larger machines are scheduled for delivery beginning in FY26, with massive scale-up expected from FY27.

TDPS is also targeting the 60-70 MW space for even larger gas turbine applications, establishing a design and engineering centre in the United Kingdom to develop generators in the 50-150 MW range.

Strong Financial Performance and Growth Projections

The company delivered robust financial results in H1 FY26, demonstrating the strength of current market demand.

Management estimates revenue growth from ₹1,279 crore in FY25 to ₹1,800 crore in FY26 and ₹2,000 crore in FY27. The company is currently booking orders at a run rate of around ₹550 crore per quarter, a pace expected to sustain into the next financial year.

Diversified Growth Through Hydro and Railway Segments

The hydro segment represents a cornerstone of the company's renewable energy portfolio, with primary growth driven by international markets, particularly Nepal and Vietnam. FY27 is anticipated to be one of the highest years in history for hydro, primarily driven by exports.

In the railway sector, the company is expanding traction motor production for US, European, and Russian markets, with volume production expected to commence in Q1 FY27. The railway business order book grew significantly to ₹316 crore from ₹42 crore at the start of FY25.

Manufacturing Expansion to Support Growth

To support rising demand, TD Power Systems is commissioning a third manufacturing facility in Tumkur, fully operational from December 2025. The plant is designed to support larger generators, motors, and critical sub-assemblies, with existing facilities including 25% buffer capacity for short-term growth.

With this expansion and ongoing optimization, management estimates total revenue potential of ₹2,500-2,600 crore. The UK design centre is expected to offer prototype machines for customer testing by early January 2026, representing what management calls a "multiple hundred crore" opportunity.

TD Power Systems Limited has announced the commencement of commercial operations at its newly established Unit 3 factory, marking a significant milestone in the company's expansion strategy. The development was communicated to stock exchanges on December 18, 2025, under Regulation 30 of SEBI Listing Regulations.

Facility Details and Location

The new Unit 3 factory is strategically located in the Japanese Industrial Township Vasanthanarasapura 3rd Phase Industrial Area in Tumkur District. This facility establishment follows the company's earlier intimation dated November 29, 2023, regarding the allotment of land for setting up manufacturing operations.

Manufacturing Capabilities

The Unit 3 factory has been designed and established for the manufacture of electrical generators, motors, their sub-assemblies and parts. This expansion aligns with the company's focus on strengthening its position in the electrical equipment manufacturing sector.

Strategic Significance

According to the company's communication, this development represents an important milestone in TD Power Systems' expansion journey. The commencement of operations at Unit 3 reinforces several key strategic objectives:

• Capacity enhancement across manufacturing operations
• Commitment to operational excellence
• Enhanced capability to meet customer requirements
• Foundation for achieving long-term sustainable growth

The establishment and operationalization of Unit 3 demonstrates the company's continued investment in expanding its manufacturing infrastructure and capabilities in the electrical equipment sector.