SHANTI Bill - fueling nuclear power growth | Sector Update

We retain Buy on KSB with Target Price unchanged at Rs 920. The passing of SHANTI Bill (Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India) will act as a strong catalyst for nuclear energy equipment and engineering cos over the medium-to-long term. As private participation gains traction and project visibility improves, ancillary suppliers across nuclear systems, cooling circuits, and critical flow-control equipment will gain immense significance. KSB, with its PTR and a partner to existing NPCIL facilities, will stand to benefit as private players begin investing, supported by the GoI’s continued push for SMRs (small modular reactors) and broader deregulation of the nuclear power sector. We see value unfold over CY26E/27E; factoring in 14%/13% CAGR in revenue/ PAT over CY24-27E.

Private cos can now own and operate nuclear power plants:

Under the proposed framework, the Centre may license government entities, private companies, and joint ventures to build, own, operate, and decommission nuclear power plants, including through PPPs, while also permitting participation in select parts of the nuclear value chain such as fuel fabrication (up to certain limits), fuel handling and storage, and the use of approved equipment, technology, and software. Keeping the safety and criticality aspect, functions such as uranium enrichment, spent fuel management, and heavy water production however remain under the control of the Centre. GOI also retains control over radioactive substances, radiation-generating equipment to address safety hazards.

Removal of supplier liability and capping operator’s liability:

The SHANTI Bill seeks the removal of the supplier liability clause under the Civil Liability for Nuclear Damage Act (CLNDA), 2010, which had earlier deterred foreign participation in domestic nuclear projects. The Bill also caps civil liability for any nuclear incident for operators based on plant size, at up to Rs 30bn for large plants (>3,600 MW), up to Rs 15bn for mid-sized plants (1,500–3,600 MW), and up to Rs 1bn for smaller installations including SMRs. The bill also allows up to 49% FDI in nuclear power projects and aims to establish a unified legal framework for atomic energy. To further deregulate the sector the government has also proposed bringing in a specialized tribunal to address nuclear liability disputes outside the civil courts.

Private participation – a must:

GOI’s ambitious goal of 100 GW capacity by 2047e will entail private sector participation, which is restricted under the existing atomic power laws in India. The passage of SHANTI BILL will be a huge positive as it addresses the long-standing bottlenecks across the nuclear energy value chain, citing rising domestic power demand, the rapid expansion of data centers, and India’s 2070 net-zero commitment as key drivers behind the renewed push for nuclear energy.

Valuation, view and key risks:

Our interaction with experts suggests that pumps and valves account for ~3% of the project cost. KSB Ltd, with its long-standing track record of supplying to NPCIL, stands to benefit as nuclear power generation gains pace. Retain BUY with TP at Rs920. (valued at 45x Sept’27e EPS). Key risks: Unfavorable domestic capex cycle, and further delay in NPCIL approvals.

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Analyst:

• Mohit Surana - Senior Research Analyst, Institutional Equities (NISM-202300189881)
• Mohd Haris - Research Associate, Institutional Equities (NISM-202400161268)

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