The Summer heat is putting the spotlight on India’s power sector stocks. Given the surge in demand, JM Financial has shared a detailed analysis of the power stocks that are best positioned to benefit from this summer crunch and shared its top picks.
Let’s take a look at their investment rationale –
JM Financial top power picks: Who stands to gain most
According to the brokerage report, not all power companies are equally placed to benefit from this situation. Some have more open capacity to sell electricity at higher prices, especially during peak hours.
JM Financial’s summer pecking order for the power sector ranks Adani Power at the top, as of the report shared on March 19. Tata Power comes next, with a ‘Buy’ rating, a target price of Rs 429, and an upside potential of about 6% from its current price. NTPC follows, showing an upside of around 10% with a target price of Rs 420.
Adani Green, rated ‘Buy’, has a target price of Rs 1,204, suggesting an upside of nearly 39%. JSW Energy is also on the brokerage’s ‘Buy’ list, with a target price of Rs 614 and an upside of almost 20%.
In contrast, Coal India is placed much lower in the pecking order with a ‘Reduce’ rating, a target price of Rs 420, and a downside potential of about 10%.
Evening demand surge signals supply stress
One of the biggest triggers behind this view is the sharp rise in power demand during non-solar hours. According to the brokerage report, “Power demand touched 238GW (flat YoY) on 10th Mar’26 at 10:30 AM (solar hours) and 224.6GW (7% YoY) at 7:00 PM (non-solar hours).”
This shows that while daytime demand remains stable, evening demand is rising faster. More importantly, “The growth in non-solar hours peak power demand (225GW at 7:00PM on 10th Mar’26) is explicitly indicating periods of tight supply.”
Power plants running near their limits
To meet this rising demand, most power plants are already operating at very high levels. According to the brokerage report, The brokerage report noted, “In the evenings, hydro plants are running at 67% capacity, gas plants at 28%, nuclear plants at 87%, and coal plants at 95%, showing that most sources are close to full utilisation.”
This means coal plants are running almost at full capacity, while even other sources are being pushed hard. The pressure is also visible in grid stability.
Power prices spike as demand outpaces supply
With supply struggling to keep up, electricity prices on exchanges have started rising sharply. According to the brokerage report, “the supply-demand imbalance pushed clearing prices well above the previous day’s average of Rs 4.60/kWh, a jump of Rs 1.00/kWh or 21.7% in a single day.”
Changing market dynamics and role of exchanges
The way electricity is traded is also evolving. According to the brokerage report, “DAM continues to serve as the stable, planned procurement platform. In contrast, RTM is dominated by discoms and used to manage demand forecasting inefficiencies and RE intermittency.”
What it means for the power sector
Overall, JM Financial believes the current situation could favour companies that have spare capacity to sell power when prices are high.
“With deficits anticipated in gas and hydro, we expect higher volume and prices on power exchanges, benefitting utilities with open capacities,” according to the brokerage report.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.