Whalesbook
A strong rebound in electricity demand is expected from mid-May through fiscal year 2027, driven by El Nino conditions. JM Financial points to stabilization following a temporary disruption in March, which saw peak demand reach 224.6 gigawatts during non-solar hours on March 10, 2026. This shift is clearing the path for sustained demand growth.
Supply Shortages to Boost Coal Power and Merchant Rates
Supply is expected to tighten, particularly in the evenings when about 80 gigawatts of solar capacity is offline. Gas-based generation has also dropped significantly to around 2 gigawatts from 8-12 gigawatts previously. Lower rainfall and reduced snow cover further limit hydro generation. These combined factors should increase coal-fired power output and merchant power prices during FY27.
Top Stock Picks for the Emerging Trends
JM Financial has selected companies positioned to capitalize on these shifts. Suzlon Energy is noted as a direct investment in wind capacity expansion, fitting well with evening demand needs. NTPC Ltd. and JSW Energy are favored for their scale and pricing power, respectively. CESC and Adani Green Energy provide a mix of stability and growth via integrated and renewable energy assets.
NTPC and JSW Energy: Key Growth Plays
NTPC Ltd. holds a 'Buy' rating with a target price of ₹420, implying a 9% potential increase. JM Financial sees this driven by rising coal power output as demand grows and other sources are constrained. JSW Energy is also rated 'Buy', with a target of ₹614, suggesting a 21% rise. JSW's significant merchant market presence and expanding capacity are seen as primary growth factors.
Suzlon Energy: Capitalizing on Evening Demand
Suzlon Energy is rated 'Buy' with a target of ₹64, indicating a 30.6% potential gain. JM Financial highlights Suzlon's importance in wind power, vital when solar generation drops in the evenings. The company's enhanced execution and a supportive demand cycle are expected to fuel growth, with forecasts suggesting 8-10 gigawatts of new wind capacity in FY27.
CESC and Adani Green: Stability and Renewable Growth
CESC is recommended with a 'Buy' rating and a target of ₹196, representing a 22% potential upside. Its integrated model, covering generation and distribution, provides stable cash flows and additional earnings during peak demand. Adani Green Energy, rated 'Buy' with a ₹1,204 target, is poised for growth through ongoing renewable capacity additions and better pricing in tighter merchant markets.