Whalesbook
Monsoon Slows Power Demand, Hitting Thermal Output
India's thermal power generators are facing reduced output as subdued demand growth continues through FY26, largely due to an extended monsoon. Total energy consumption in Q4FY26 rose only 1.9 percent year-on-year to 425 billion units, a slowdown from the 8 percent quarter-on-quarter increase. This pressure has led to lower generation for companies like NTPC, which reported a 4 percent year-on-year decline in output. Its plant load factor (PLF), a measure of capacity utilization, dropped to 65 percent. Tata Power also reported a significant reduction in generation at its Mundra facility.
Renewables Gain Momentum as Thermal Output Falls
In contrast, the renewable energy sector is demonstrating strong growth. ACME Solar Holdings and NTPC Green Energy are expanding capacity, while Adani Green Energy is set for significant year-on-year generation increases. This divergence shows renewables capturing more market share and growth opportunities.
Individual Company Performance Varies
Company-specific results show mixed performance. NLC India anticipates higher revenue from new capacity and improved plant load factors at its Ghatampur and TPS-II plants, with operating profit potentially jumping over 80 percent year-on-year. JSW Energy expects revenue to rise 40 percent, driven by better PLFs and higher prices on power sold directly to the market (merchant sales), although higher costs could reduce net profit. Ancillary firms Skipper and Genus Power Infrastructures are positioned for steady growth, supported by large order backlogs. Genus Power is projected to meet its FY26 revenue growth targets.
Power Transmission: A Key Growth Area
Significant long-term opportunities exist in power transmission infrastructure. An estimated ₹9.2 trillion in capital expenditure is planned between 2023 and 2032 to expand the grid, driven by growing renewable capacity and integration needs. This outlook positions companies like Power Grid Corporation of India for substantial long-term gains, even if its Q4FY26 results are expected to be average.