Business News : India is gearing up for a major transformation in the nuclear power sector over the next two decades. The government aims to increase the country's nuclear power generation capacity from 9 GW to 100 GW by 2047. This will require an investment of around Rs.20 lakh crore (roughly Rs.1 lakh crore). This means, the average annual expenditure for the next 20 years will be Rs.1 lakh crore (roughly Rs.1 lakh crore).
Three companies play different roles in the supply chain of nuclear power projects
The benefits of increasing nuclear power capacity will not be limited to electricity generation. It can also provide significant business opportunities for companies providing nuclear reactor equipment, specialized pipes, tubes and construction services. Three companies are particularly prominent in this sector: MTAR Technologies, Ratnamani Metals and Tubes and Hindustan Construction Company (HCC). All three companies play different roles in the supply chain of nuclear power projects.
-
MTAR Technologies
MTAR Technologies works with Nuclear Power Corporation of India (NPCIL) in nuclear power sector. NPCIL operates and develops nuclear power plants in the country. MTAR manufactures more than 15 specialized devices and assemblies used in nuclear reactors. The company's most important product is the fuel machining head, which is assembled from over 700 small and precise parts. It is used to introduce and remove nuclear fuel from reactors for power generation. The company also manufactures major assemblies such as fuel transfer systems, end shields and calendria.
MTAR has bagged an order worth Rs 504 crore for the expansion of Units 5 and 6 of the Kaiga Nuclear Power Plant in Karnataka. The company has also received new orders worth over Rs 130 crore for maintenance and life extension of old reactors. As of Q2 FY27, the company had orders worth Rs 820 crore related to nuclear power business, which is 13.7% of its total order book of Rs 5,976.5 crore. The company expects revenue from this business to grow from 2028 onwards. Additionally, plans by private companies to build four new 700-MW reactors could provide MTAR with a business opportunity of Rs 700 crore to Rs 1,000 crore. Currently, the share price of MTAR is Rs.5,470.
-
Precious metals and tubes
Ratnamani Metals and Tubes manufactures stainless steel and nickel alloy-based specialty pipes and tubes for nuclear power plants. These are used in heat exchangers and high-pressure steam systems. The company has also received a development order from National Pentagon Corporation of India (NPCIL) to manufacture steam generator tubes. The company has formed a joint venture with Switzerland's TechnoEnergy AG, Ratnamani Fano Spooling Solutions (RFSS), in which Ratnamani holds a 75% stake. Located in Anjar, Gujarat, the plant has an annual production capacity of 7,000 metric tonnes.
RFSS revenue in the second quarter of FY27 was Rs 157 crore, up from Rs 110.4 crore in the previous year. The company's EBITDA increased by 138% to Rs.85.9 crore, and net profit increased by 153.7% to Rs.64.7 crore. Its order book has crossed Rs.3,000 crore. Currently, its share price is Rs.2,412.
-
HCC
Hindustan Construction Company (HCC) has been a long-standing contributor to India's nuclear power projects. The company has contributed to the construction of approximately 60% of the country's total installed nuclear power generation capacity. Its work mainly involves the construction of reactor buildings and other necessary structures. The company is currently working on the Fast Reactor Fuel Cycle Facility (FRFCF) project. HCC intends to seek contracts for the construction of PHWRs, LWRs and other advanced nuclear reactor projects in the future.
In the second quarter of fiscal 2027, the company's total revenue fell 6.7% to Rs 925.2 crore. Profit also fell by 52.8% to Rs 22.6 crore. The company has a total order book of Rs 12,901 crore and is targeting new orders of Rs 15,000 crore in FY27. Its share price is Rs.18.58.
What are the implications for investors?
India's nuclear power mission could provide long-term business growth opportunities for these three companies. However, along with getting new orders, they also face challenges like completing projects on time, controlling costs and reducing debt. Therefore, it is important for investors to consider not only the order book but also the companies' profitability, debt and ability to complete work.