Alpha | Skipper Ltd. – Equity Research Desk

Skipper Ltd – Energizing the Future

Established in 1981 and headquartered in Kolkata, Skipper Ltd. is a well-established manufacturer of Transmission and Distribution (T&D) structures (Towers and Poles). The company is also a prominent player in the polymer industry and a reliable partner for executing critical infrastructure EPC projects. The company is the largest manufacturer of transmission towers in India and ranks among the top 10 globally. With 4 manufacturing facilities across India, the company boasts a combined annual capacity of 300,000 MTPA for engineering products and 62,000 MTPA for polymer pipes and fittings. It currently serves customers in over 50 countries worldwide.

Products and Services

The company’s offerings can be classified across 3 segments:

1. Engineering – Production of T&D structures such as power distribution poles, power transmission and telecom towers, railway structures, monopoles, MS and high tensile angles.
2. Infrastructure – EPC projects specialising in live line operations, retrofitting and power evacuation solutions, coating solutions.
3. Polymer – PVC pipes and fittings, HDPE pipes, bath accessories, tanks, borewell pipes and fittings, CPVC solvent cement, etc.

Subsidiaries: As of FY24, the company has 1 joint venture and no other subsidiary/associate company.

Investment Rationale

• Expanding order book – In FY25, the company reported its highest-ever annual order inflow, exceeding Rs.5,335 crore. The year-end order book stood at Rs.7,458 crore, also a record high, with a well-diversified mix- 88% from domestic and 12% from international markets. During the year, the company secured its first order in the U.S. market through a multi-million-dollar contract with a leading regional EPC player. It also entered the EPC substation segment with a major transmission line order. The company was selected as a preferred supplier and contractor by Power Grid for higher voltage transmission projects and secured key orders, including the 800 kV Khavda HVDC project and several 765 kV / 400 kV projects.

• Growth strategies – Skipper is pursuing aggressive growth strategies, including a capacity expansion of 75,000 tons already underway and plans for an additional 75,000 tons in the coming year, supported by a Rs.200 crore capex. In the latest quarter, the company’s engineering and polymer segments achieved their highest-ever revenues, each posting 34% year-on-year growth. Within the polymer business, the company is sharpening its focus on the plumbing segment and expects 25% – 30% growth, along with improved margins. Additionally, the company has secured all necessary approvals to enter the gas pipeline segment using MDPE (Medium-Density Polyethylene) pipes, leveraging its existing HDPE (High-Density Polyethylene) infrastructure as part of its broader polymer strategy.

• Q4FY25 – During the quarter, the company generated its highest ever quarterly revenue of Rs.1,288 crore, an increase of 12% compared to the Rs.1,154 crore of Q4FY24. Operating profit increased from Rs.109 crore of Q4FY24 to Rs.124 crore of Q4FY25, a growth of 14%. The company reported net profit of Rs.48 crore, an increase by 90% YoY compared to Rs.25 crore of the corresponding period of the previous year.

• FY25 – During the FY, the company generated revenue of Rs.4,624 crore, an increase of 41% compared to the FY24 revenue. Export revenue grew by 21% during the period. Operating profit is at Rs.452 crore, up by 41% YoY. The company reported net profit of Rs.149 crore, an increase of 82% YoY.

• Financial Performance – The 3-year revenue and net profit CAGR stands at 39% and 81% respectively between FY23-25. The company has a robust capital structure with a debt-to-equity ratio of 0.62. Average 3-year ROE and ROCE is around 10% and 19% for FY23-25 period.

Industry

India’s electrical equipment market is expected to grow from US$ 52.98 billion in 2022 to US$ 125 billion by 2027, registering a strong CAGR of 11.68%, driven by increasing electrification, infrastructure development, and policy support. The sector benefits from its close linkages with capital goods, engineering, and construction industries. To meet rising power demand – projected at 458 GW by 2032 – the government has committed Rs.9.15 lakh crore (US$ 109.5 billion) to upgrade power infrastructure. With an installed capacity of 466.24 GW as of January 2025, India is the world’s third-largest electricity producer and consumer. The focus on universal access to power, coupled with a shift towards renewables and grid modernization, creates significant long-term opportunities in the T&D space.

Growth Drivers

• Government initiatives, such as the PM Gati Shakti National Master Plan, are playing a crucial role in strengthening the capabilities of the T&D sector.
• The government has de-licensed the engineering sector with 100% FDI permitted.
• Rising electricity demand, accelerated urbanization, the integration of renewable energy, ongoing grid digitalization efforts, and the replacement of aging infrastructure across various regions are expected to serve as major growth catalysts for the T&D industry.

Peer Analysis

Competitors: Elecon Engineering Company Ltd, CG Power & Industrial Solutions Ltd, etc.

Among the above competitors, the company stands out with steady revenue growth, stable return ratios, and healthy earnings potential, reflecting the company’s financial stability and its ability to efficiently generate income and returns on invested capital.

Outlook

The company is witnessing a robust bidding pipeline with a healthy conversion rate, and management remains confident about strong order inflows, which had previously been limited by capacity constraints. With its ongoing and planned capacity expansions, the company now has clear revenue visibility. It is targeting a growth rate of 20–25% over the next 2–3 years and has committed Rs.800 crore in capital expenditure over the next four years. Additionally, Skipper is eyeing significant opportunities in the U.S. market, with a bid pipeline of around $150 million.

Valuation

We believe the company is well-positioned to sustain its growth momentum, supported by a strong order pipeline and anticipated capacity expansions. We recommend a BUY rating in the stock with the target price (TP) of Rs.569, 41x FY27E EPS.

SWOT Analysis

Recap of our previous recommendations (As on 11 July 2025)

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