Scaling Up: How Indian Entrepreneurs Expand Their Markets

One of the strongest indicators of success lies in the promoter’s mindset. In India, many entrepreneurs are not content with merely defending their existing business; they are driven to expand their Total Addressable Market (TAM). This stands in contrast to many multinational corporations, which, in our view, prefer to stick narrowly to their “core competencies” and leave adjacent opportunities or global markets to the parent, thereby narrowing their TAM.

This entrepreneurial mindset is about more than just chasing growth — it is about building capabilities, investing in innovation, and seizing opportunities that others might consider marginal.

TD Power Systems (TD Power) ^:  Growing the TAM

A strong example of this mindset is TD Power. Today, the company commands over 80% market share in the domestic industrial power segment, working with virtually every domestic OEM (Original Equipment Manufacturer). TD Power began as an AC generator manufacturer serving captive power and waste-heat recovery applications in India. Under the leadership of Mr. Nikhil Kumar, it has delivered an impressive 70%+ PAT CAGR over the past decade. This success has been underpinned by a deliberate strategy of broadening the product portfolio, scaling internationally, and building partnerships with marquee OEMs across the globe.

1. Broadening the Product Portfolio

TD Power has steadily evolved from a steam generator specialist into a diversified equipment manufacturer. Its product range now spans AC generators for gas and hydro applications, diesel and gas engines, and large synchronous motors for irrigation and locomotives. Importantly, TD Power has complemented its manufacturing capabilities with technology tie-ups — such as agreements with Siemens AG and Baker Hughes Brush Power — giving it access to global design expertise.

2. Scaling Beyond India

At the time of its IPO in FY11, exports contributed less than 10% of revenues, with an installed base of just 1,500+ generators across 34 countries. Fast forward to FY25, exports have climbed to 64% of sales, supported by deliberate investments in overseas marketing and client relationships. Today, TD Power has an installed base of 7,400+ generators across 111 countries — a testament to its ability to execute consistently and win trust in highly competitive international markets.

3. Winning Marquee Clients

As a predominantly B2B business, TD Power derives most of its generator revenue from supplying OEMs of turbines and engines. Its client roster includes Siemens Ltd, Voith Hydro, General Electric, and Triveni Turbine Ltd, with the top 10 customers accounting for roughly 65–70% of manufacturing revenues. Over the years, TD Power has broadened this base by adding marquee global names such as Baker Hughes in the oil and gas sector — proof of its credibility and ability to meet demanding global standards.

Not every diversification succeeds. For example, in FY11, EPC (Engineering, Procurement, and Construction) accounted for 43% of revenues. Over time, the company prudently exited this business to focus more sharply on its manufacturing strengths.

Conclusion

We believe that companies led by promoters who are constantly preparing for the future — by widening their product offerings, entering new markets, and building global customer relationships — are the ones that steadily expand their TAM.

As Howard Marks reminds us, “You can’t predict. You can prepare.” For investors, the real edge lies in identifying businesses where management is preparing not just for the next quarter, but for the next decade.

Equally important is tracking both the opportunities a promoter chooses to pursue and the traps they have the discipline to exit. This balance often distinguishes tomorrow’s compounding franchises from businesses that merely defend the status quo. In the long run, it is this vision and adaptability that may create enduring winners in the Indian market.

Fund Manager Disclosure: 

• The fund manager, relative or associate may have financial interest in the subject company

• The fund manager, relative, associate or Alchemy, may have an actual or beneficial ownership of 1% or more or long/ short positions in the subject security(ies) for himself     or for the clients.

• The fund manager or associate may have received compensation or other benefit in the subject security(ies).

• The discussions shall not be relied upon as advisory or decisions to buy or sell any securities.

Disclaimer:

• ^These are investment ideas and there is no assurance that these will form part of client’s portfolio.
• Investments are subject to market risks, please read all product /strategy related documents carefully before investing.