India’s power sector slowed sharply in the September quarter as prolonged monsoon rains curbed both demand and plant load factors. In fact, thermal load factors slip to 61.9% as heavy rains dampen demand. How would this impact the second quarter earnings performance? Key brokerage firm, Nuvama expects muted profits across NTPC, Tata Power and Power Grid.
Nuvama on the outlook for Power sector
According to Nuvama’s Power Sector analysis, electricity demand rose only 3.4% year-on-year in Q2FY26 to about 450 billion units, while peak demand eased slightly to 229 GW from 231 GW a year earlier.
Citing data from the Power System Operation Corporation (POSOCO) and the Central Electricity Authority (CEA), the brokerage said average temperatures dropped to 27°C in September 2025 from 28°C in September 2024, reducing cooling-related consumption.
The brokerage expects companies under its power coverage including NTPC, Tata Power, Power Grid Corporation, CESC, Inox Wind, Suzlon Energy, ACME Solar and Indian Energy Exchange to post subdued profit-after-tax (PAT) growth in the September quarter due to weak generation performance.
Nuvama on NTPC: Regulatory cushion but slower growth
According to Nuvama Research estimates, NTPC’s revenues are projected to decline marginally to Rs 4,01,883 crore in Q2FY26 from Rs 4,03,276 crore a year earlier, while Profit is likely to fall 4.8% YoY to Rs 44,268 crore. The company’s average PLF is pegged at 69.1%, lower than 74.2% in Q2FY25.
The report said NTPC’s profitability remains relatively stable under the regulated return model, but growth has been capped by limited project commissioning in the past year and subdued electricity demand during the quarter. “Limited commissioning over the last 12–15 months and weak PLF in the standalone business have weighed on quarterly performance,” Nuvama noted.
The company’s EBITDA margin is expected to remain steady at 24%, while coal stock at NTPC plants stood at 18 days, below the 21-day threshold but adequate given lower utilisation, as per CEA data cited in the report.
Nuvama on Tata Power: Solar gains offset Mundra challenges
Tata Power is expected to record a 11.7% YoY increase in Net Profit to Rs 10,349 crore from Rs 9,265 crore, driven by higher output from its solar manufacturing business, according to Nuvama Institutional Equities. The brokerage highlighted that the company’s renewable energy capacity continues to scale up steadily, but the temporary shutdown of the Mundra ultra mega power project (UMPP) following the lifting of Section 11 benefits could dampen the quarter’s performance.
Nuvama expects EBITDA margin to stay around 21%, with consolidation of EPC and module sales remaining key monitorables in the second half of FY26.
Nuvama on Power Grid: Steady but slow
For Power Grid Corporation of India (PGCIL), Nuvama Research expects a 2% YoY rise in PAT to Rs 37,933 crore, supported by a 3.3% increase in revenue to Rs 1,05,943 crore. The company’s EBITDA margin is projected at 85%, compared with 86% in Q2FY25.
“Commissioning on the ground remains weak while incremental TBCB projects continue to deliver low RoEs,” Nuvama said. Capex execution and new project awards remain key factors to monitor as the company navigates a period of lower incremental returns.
Nuvama on CESC: distribution focus cushions earnings
CESC is expected to post 13% YoY growth in Net Profit to Rs 4,000 crore, according to Nuvama Research estimates. Revenues are forecast to rise modestly to Rs 49,064 crore from Rs 47,000 crore. The company’s generation PLF is estimated at 89.3%, compared with 92.5% a year earlier.
The brokerage expects the distribution business in Rajasthan to continue performing well, while Malegaon losses have narrowed thanks to tighter transmission and distribution control. The EBITDA margin is likely to remain stable at 22%.
Nuvama on Renewable and exchange trends: solar hours drag prices lower
According to Nuvama Research citing Indian Energy Exchange (IEX) data, solar-hour supply far exceeded demand in September 2025, pulling down average market clearing prices to Rs 2.3 per unit, compared with Rs 2.9 per unit in September 2024.
Non-solar hours, by contrast, continued to see tighter supply with prices averaging Rs 5.1 per unit, only slightly below Rs 5.7 per unit last year.
IEX’s total electricity volume, including Renewable Energy Certificates (RECs), rose 8% YoY in Q2FY26 to 39,638 million units, while REC volumes declined 30% YoY. The brokerage expects IEX’s PAT to rise 20% YoY to Rs 1,300 crore, supported by steady trading activity and higher margin efficiency.
Nuvama on Renewable energy: Tendering strong amid rebidding buzz
The renewable energy tendering pipeline stood at about 331 GW as of September 2025, according to Nuvama Research and CEA data. Of this, around 40 GW of projects could undergo rebidding as developers and buyers transition toward round-the-clock renewable supply models.
Renewable capacity additions totalled roughly 20 GW year-to-date in FY26 (till August), led by steady commissioning in both solar and wind segments despite weather disruptions.
Nuvama on ACME Solar and Inox Wind: Uneven gains amid weather drag
As per Nuvama Research, ACME Solar is expected to post 84% YoY growth in revenue to Rs 4,776 crore, with EBITDA up 89% to Rs 4,179 crore and PAT jumping 487% to Rs 898 crore. However, PLF levels have slipped to 22% from 24.6% a year ago due to weak irradiation during the monsoon.
Inox Wind is projected to execute around 210 MW in Q2FY26, with revenue up 54% YoY to Rs 11,279 crore and PAT up 34% to Rs 1,243 crore. Margins, however, remain modest at 18–19% owing to a high EPC component.
Similarly, Suzlon Energy is expected to report 38% YoY growth in revenue to Rs 29,159 crore, with PAT up 28% to Rs 2,575 crore, though heavy rains curtailed execution and compressed margins to 16%.
Coal and generation mix: Inventories build up
Thermal power retained a 66% share of total generation in Q2FY26, while non-fossil generation stood at about 33%, according to CEA data cited by Nuvama Research.
Coal inventory at power plants reached 46 million tonnes, up 24% YoY, translating to around 16 days of stock on average. NTPC’s own plants held 18 days of coal, slightly below the 21-day comfort benchmark. India’s installed capacity as of August 2025 stood at 496 GW, including over 240 GW from renewable sources such as solar, wind, and hybrid systems.
Nuvama’s power sector outlook: Extended rains distort near-term visibility
Nuvama Institutional Equities expects the extended monsoon to continue impacting generation volumes through October. Demand recovery is likely as temperatures normalise, though the September quarter’s performance will remain subdued.
“Extended monsoon conditions have disrupted seasonal patterns in demand, particularly in solar-heavy states,” the brokerage observed.
In the medium term, Nuvama remained positive on the sector, citing drivers such as industrial demand, data centre expansion, and rural electrification. Its top stock preferences remain CESC, NTPC, ACME Solar, and Inox Wind.
The brokerage stance on the sector’s structural story remained intact, but this quarter is expected to serve as a reminder that India’s power economics still hinge heavily on weather patterns and the balance between thermal reliability and renewable scale is becoming more critical than ever.