India's power demand is running well ahead of expectations, strengthening the outlook for electricity generators and transmission companies, according to Jefferies. The brokerage's latest India Power Monthly maintains its FY27 demand growth estimate at 7%. It also highlights Adani Energy Solutions, JSW Energy and NTPC as its top picks in the sector.
Power demand rose 13% year-on-year in August 2026, despite a 4% growth base in August last year. Generation has remained strong into September, rising 22% YoY so far, compared with a 2% decline in the year-ago period. Demand during April-August is up 9% YoY, supporting Jefferies' view that the FY27 growth trajectory remains intact.
Adani Energy, JSW Energy, NTPC Top Picks
Adani Energy Solutions is Jefferies' preferred stock, with a Buy rating and a price target of Rs 2,060, implying around 45% upside from the closing price of Rs 1,421.90. JSW Energy also carries a Buy rating, with a Rs 720 target versus Rs 534.65, implying around 35% upside.
NTPC has a Buy rating and a Rs 425 target, implying around 27% upside from Rs 333.25. Among the other stocks covered, Adani Green Energy is rated Buy with a Rs 1,695 target, while Power Grid is also rated Buy with a Rs 315 target.
However, Jefferies remains cautious on Tata Power, assigning an Underperform rating and a Rs 335 price target against the stock's closing price of Rs 369. The target implies around 9% downside. The brokerage also retains an Underperform rating on Indian Energy Exchange.
The brokerage also flagged a sharp rise in merchant power prices. Prices were up 22% YoY in August, while its report notes that merchant prices in September so far have been more than twice their year-ago levels. A below-average monsoon, potentially linked to El Niño conditions, could provide another upside trigger for demand and merchant power prices.
Recent industry data supports the strong demand backdrop. India's August electricity consumption reached a record 169 billion units, up 12.85% YoY.
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