India’s power sector is entering a potentially favourable phase as electricity demand rebounds and renewable-energy investments pick up, but Jefferies sees one more variable that could change the outlook: the monsoon. The brokerage says a below-average monsoon, if El Niño coincides with the June-September monsoon months, could add upside to power demand.
That matters for power stocks because Jefferies is already seeing signs of a demand recovery. July 2026 power demand rose 11% year-on-year, while demand in the first four months of FY27 increased 9% year-on-year. The brokerage maintains its 7% FY27 estimated power-demand growth forecast and expects India’s power demand to grow at a 6% compound annual growth rate through FY30.
Against this backdrop, Jefferies has Torrent Power as the highest-upside stock in its utilities coverage, with 28% potential upside. JSW Energy and Adani Power follow at 27% each. The brokerage’s top picks are JSW Energy, Adani Energy Solutions and NTPC.
| Power stock | Jefferies rating | Target price | Upside |
| Torrent Power | ‘Buy’ | Rs 1,780 | 28% |
| Adani Power | ‘Buy’ | Rs 270 | 27% |
| JSW Energy | ‘Buy’ | Rs 720 | 27% |
| Adani Energy Solutions | ‘Buy’ | Rs 2,060 | 26% |
| Adani Green Energy | ‘Buy’ | Rs 1,695 | 24% |
| NTPC | ‘Buy’ | Rs 425 | 23% |
| Power Grid | ‘Buy’ | Rs 315 | 17% |
| Tata Power | ‘Underperform’ | Rs 355 | -7% |
| Indian Energy Exchange | ‘Underperform’ | Rs 108 | -15% |
Source: Jefferies, August 11, 2026.
El Niño vs La Niña: Why the monsoon matters for power demand
Jefferies’ historical analysis shows a relationship between rainfall and electricity consumption. The brokerage says stronger monsoon years usually see lower power demand, while a weaker monsoon can support demand across key consumption segments.
The report notes that when El Niño coincides with the monsoon months, it usually leads to below-normal rainfall. In the previous five such instances highlighted by Jefferies, the average rainfall deficit was 15%.
That does not mean weaker rainfall automatically translates into higher power demand in every year. Rather, Jefferies is flagging the weather pattern as a potential upside factor to its demand outlook.
The brokerage’s historical analysis also shows that industry, domestic and agricultural users together account for around 85% of power demand, making weather conditions an important variable for consumption.
Jefferies on Torrent Power: ‘Buy’
Torrent Power has the highest potential upside among the power stocks covered by Jefferies. The brokerage has a ‘Buy’ rating and a target price of Rs 1,780, implying 28% upside.
The positive sector backdrop includes stronger electricity consumption and firmer merchant prices. Average merchant power prices rose 19% year-on-year to Rs 5.0 per unit in July 2026, according to Jefferies.
The brokerage expects the broader utility earnings trajectory to remain intact through FY26-FY29, with execution and improving demand supporting returns.
Jefferies on JSW Energy: ‘Buy’
JSW Energy is one of Jefferies’ three top picks in the utilities sector. The brokerage has a ‘Buy’ rating and a target price of Rs 720, implying 27% upside.
Jefferies says it prefers JSW Energy at current levels because “execution ramp-up contributes to earnings growth and leads to stock returns even with no re-rating.”
That makes execution a key part of the investment case rather than a dependence on valuation expansion.
Jefferies on Adani Power: ‘Buy’
Adani Power has a ‘Buy’ rating from Jefferies and a target price of Rs 270, implying 27% upside.
It is among the stocks with the highest potential upside in the brokerage’s utilities universe. Jefferies’ broader sector thesis is supported by the recovery in electricity demand and higher merchant power prices.
The brokerage estimates Adani Power’s EV/EBITDA at 23.1 times in FY26, 22.1 times in FY27 and 18.9 times in FY28.
Jefferies on Adani Energy Solutions: ‘Buy’
Adani Energy Solutions is another top pick, with a ‘Buy’ rating and a target price of Rs 2,060, implying 26% upside.
Jefferies says the company is “locked in for 20%+ visible medium-term EBITDA CAGR, which should drive upside on delivery.”
The company’s estimated EV/EBITDA declines from 29.6 times in FY26 to 22.7 times in FY27 and 18.5 times in FY28, according to Jefferies’ valuation table.
Jefferies on Adani Green Energy: ‘Buy’
Adani Green Energy Ltd. carries a ‘Buy’ rating with a target price of Rs 1,695, implying 24% upside.
The longer-term opportunity is tied to the expansion of India’s renewable-energy capacity. Jefferies estimates renewable capacity will rise from 223,273 megawatts in FY26 to 368,273 megawatts in FY30.
Its share of total installed capacity is expected to rise from 42% to 51% over the same period.
Jefferies on NTPC: ‘Buy’
NTPC is the third top pick in Jefferies’ utilities coverage. The brokerage has a ‘Buy’ rating and a target price of Rs 425, implying 23% upside.
Jefferies says it prefers NTPC at current levels because “execution ramp-up contributes to earnings growth and leads to stock returns even with no re-rating.”
NTPC also stands out on valuation in the brokerage’s table, with estimated EV/EBITDA of 11.7 times in FY26, 8.8 times in FY27 and 8.2 times in FY28.
Jefferies on Power Grid: ‘Buy’
Power Grid Corporation of India Ltd. has a ‘Buy’ rating and a target price of Rs 315, implying 17% upside.
The stock also has exposure to a major transmission investment cycle. The Ministry of New and Renewable Energy is planning Rs 54,000 crore for the third phase of the Intra-State Green Energy Corridor.
Jefferies says Phase III aims to support evacuation of 135 gigawatts of renewable-energy capacity, roughly three times the combined size of the capacity targeted under the first two phases.
Jefferies on Tata Power: ‘Underperform’
Tata Power Company Ltd. is one of the two stocks where Jefferies has a negative view. The brokerage has an ‘Underperform’ rating and a target price of Rs 355, implying 7% downside.
That puts Tata Power on the opposite side of Jefferies’ sector preference despite the broader recovery in power demand and the expected rise in renewable-energy investment.
Jefferies on Indian Energy Exchange: ‘Underperform’
Indian Energy Exchange also has an ‘Underperform’ rating, with a target price of Rs 108, implying 15% downside.
Jefferies notes that Indian Energy Exchange volumes increased 7% year-on-year in July 2026. However, that improvement has not changed the brokerage’s negative stock view.
Power demand rises 11% as peak demand hits 270 GW
The demand recovery is already visible in the latest data. July power demand increased 11% year-on-year, following 3% growth in July 2025.
The South region led growth at 14%, while the North recorded 13% growth. The West region accounts for 31% of India’s power demand, followed by the North at 30%, South at 25% and East at 12%.
Peak demand rose 23% year-on-year to 270 gigawatts, while the peak deficit remained largely contained. All-India thermal plant load factor increased to 68% in July 2026 from 63% in July 2025.
Renewable-energy awards are picking up
Renewable-energy tendering is also showing signs of recovery. Jefferies says 4.2 gigawatts of renewable-energy awards had been made in FY27 through July, compared with 3.4 gigawatts a year earlier.
Another 1 gigawatt tender had been awarded in August through the date of the report.
The recovery follows a sharp increase in renewable-energy awards during the previous demand upcycle, with annual awards rising to 41.1 gigawatts in FY25 from 14.4 gigawatts in FY22.
Rs 54,000 crore transmission opportunity adds to the story
The renewable-energy opportunity is also creating a transmission requirement. The planned Rs 54,000 crore Intra-State Green Energy Corridor Phase III aims to support evacuation of 135 gigawatts of renewable capacity.
Jefferies says the proposed phase will use a public-private partnership framework through tariff-based competitive bidding, shifting more construction and right-of-way risks towards private transmission developers.
Power demand seen growing 6% annually through FY30
Jefferies estimates India’s power demand will rise from 1,709 billion units in FY26 to 2,178 billion units in FY30, implying a 6% compound annual growth rate.
Overall installed power capacity is projected to increase from 532,740 megawatts in FY26 to 723,740 megawatts in FY30.
Renewable capacity is estimated to rise from 223,273 megawatts to 368,273 megawatts, while renewable generation is projected to increase from 318 billion units to 597 billion units.
Conclusion
Jefferies’ latest power-sector call is built around a combination of recovering demand, higher renewable-energy awards, transmission investment and weather-linked upside risks. The El Niño angle adds another variable to watch, with the brokerage saying a below-average monsoon could provide additional support to electricity demand.
Disclaimer: This article is based on Jefferies’ India Power Monthly report. The ratings, target prices, estimates, forecasts and views cited are those of Jefferies and are presented for news-reporting and informational purposes only. They do not constitute investment advice or a recommendation to buy, sell or hold any security. Estimates and target prices may change and may not materialise. Investors should conduct their own research and consult a SEBI-registered investment adviser before making investment decisions.