Equirus Securities has started coverage on JSW Energy and Torrent Power, citing a structural rise in India's power demand. NTPC remains the brokerage's top pick in the sector due to its stable, regulated earnings model and broad expansion pipeline. Investors should note that these growth projections rely on consistent execution and stable power demand trends.
Equirus Securities has shared a positive view on India's power sector, citing a structural upcycle in electricity demand. The brokerage expects domestic power consumption to see a compound annual growth rate of 7.3% between FY21 and FY25, with peak demand projected to rise further by FY32. This demand-driven outlook has led the firm to initiate coverage on two major private sector players, JSW Energy and Torrent Power, while maintaining a strong stance on public sector giant NTPC.
Growth Outlook for Private Players
For JSW Energy, the brokerage initiated a 'Long' rating, highlighting the company’s focus on a differentiated private power platform and ambitious capacity expansion goals. Projections from the report estimate that JSW Energy could see its revenue, operating profit, and net profit grow at compound annual rates of 19%, 23%, and 24% respectively between FY26 and FY30. These targets assume the successful completion of planned projects and stable pricing power within the energy market.
Torrent Power also received an 'Add' rating, supported by its established distribution franchises and significant capital spending plans across various segments. The firm projects Torrent Power’s revenue, operating profit, and net profit to grow at average annual rates of 10%, 20%, and 12% over the FY26-FY30 period. Investors may monitor how these investments translate into actual cash flow and whether the company can maintain its margin performance in a competitive distribution environment.
NTPC Retains Top Sector Position
NTPC remains the top pick for Equirus Securities, which reiterated a 'Long' rating for the stock. The brokerage pointed to the company’s low-risk, regulated earnings model as a primary strength. Unlike private players that may have higher exposure to market-based pricing, NTPC’s business model provides a level of earnings predictability. Its growth pipeline is diverse, covering not just traditional thermal power but also new energy initiatives through NTPC Green Energy (NGEL), as well as ventures into nuclear energy and battery storage systems.
While these projections reflect a positive outlook for the power sector, investors should remain aware of potential risks. These include the risk of delays in project execution, rising costs for raw materials like coal or imported components, and regulatory changes that could affect tariff structures. The actual performance of these companies will depend on their ability to manage debt while funding large expansion projects and maintaining operational efficiency as new capacity comes online.