The power sector stocks are in the spotlight given the unseasonal rains in many parts of the country. JM Financial’s utilities note builds its case around a demand rebound after a short weather-led disruption in March. Alongside this, weak rainfall and lower snow cover point to a shortfall in hydro generation. This combination is expected to support coal-based output and merchant tariffs across FY27.
Against this backdrop, JM Financial’s ‘Buy’-rated names are those with exposure to thermal generation, merchant markets, transmission growth and wind capacity additions. Accordin to the brokerage report, Suzlon Energy stands out as a direct play on wind capacity growth tied to evening demand patterns, while NTPC Ltd. and JSW Energy offer scale and pricing leverage. CESC and Adani Green provide a mix of stability and growth through integrated and renewable portfolios.
JM Financial on power demand in FY27
Electricity consumption is is expected to strengthen from mid-May and sustain into FY27 under El Nino conditions, according to the domestic brokerage house. Power demand, which had reached 224.6 gigawatt during non solar hours on 10 March 2026, cooled temporarily due to an unusual cloud formation but is now stabilising.
The brokerage expects a tighter supply situation during non solar hours as nearly 80 gigawatt of solar capacity drops out in the evening, while gas-based generation has already fallen to about 2 gigawatt from a range of 8 to 12 gigawatt earlier. Alongside this, weak rainfall and lower snow cover point to a shortfall in hydro generation. This combination is expected to support coal-based output and merchant tariffs across FY27.
Against this backdrop, JM Financial’s ‘Buy’-rated names are those with exposure to thermal generation, merchant markets, transmission growth and wind capacity additions.
JM Financial on NTPC: ‘Buy’
JM Financial has a ‘Buy’ rating on NTPC with a target price of Rs 420, implying an upside of 9% from the current market price of Rs 386. The brokerage’s view is anchored in a likely increase in coal-based generation as demand rises and alternative sources face constraints.
The report indicates that NTPC stands to gain from sustained utilisation levels as peak demand moves into evening hours where solar supply is unavailable. With hydro output expected to remain weak through the summer and gas-based generation constrained, thermal plants are expected to carry a larger share of the load.
JM Financial also factors in the possibility of continued policy support through measures such as extension of Section 11, which enables higher plant load factors for coal-based stations. This provides visibility on generation volumes and supports earnings stability into FY27 even as fuel mix dynamics evolve.
“A spike in coal-fired generation is expected as demand rises and supply gaps emerge,” JM Financial adds.
JM Financial on JSW Energy: ‘Buy’
JM Financial has a ‘Buy’ rating on JSW Energy with a target price of Rs 614, indicating an upside of 21% from Rs 509. The brokerage highlights the company’s exposure to merchant markets and ongoing capacity additions as key drivers.
The firm expects merchant tariffs to remain firm during peak demand periods, particularly in the evening when supply tightens. JSW Energy, with its diversified generation portfolio, is positioned to capture these pricing opportunities.
Capacity additions over FY26 to FY28 are expected to support volume growth, while improving utilisation across assets is likely to drive operating leverage. The combination of higher tariffs and rising output provides a base for earnings growth over the medium term.
“Utilities with high merchant portfolio stand to benefit from evening demand surge,” JM Financial said.
JM Financial on CESC: ‘Buy’
JM Financial has assigned a ‘Buy’ rating on CESC with a target price of Rs 196, implying an upside of 22% from Rs 161. The brokerage’s stance is based on the company’s integrated business model combining generation and distribution.
The distribution segment provides steady cash flows, while generation assets offer incremental upside during periods of higher demand and firmer tariffs. This balance reduces volatility in earnings compared to pure generation companies.
JM Financial also notes that demand recovery into FY27 is expected to support electricity consumption across urban centres, which feeds directly into distribution volumes. This strengthens revenue visibility while maintaining stable margins.
JM Financial on Adani Green Energy: ‘Buy’
JM Financial has a ‘Buy’ rating on Adani Green Energy with a target price of Rs 1,204, indicating an upside of 11% from Rs 1,085. The brokerage expects the company to benefit from continued renewable capacity additions and improved realisations in the merchant market.
The report highlights that renewable players with exposure to merchant sales are likely to see gains when supply tightens during peak demand windows. As solar output drops in the evening, any hybrid or flexible renewable capacity can capture better pricing.
Adani Green’s expanding portfolio and execution pipeline position it to scale generation volumes over FY26 to FY28, supporting revenue growth even as sector pricing remains competitive.
JM Financial on Suzlon Energy: ‘Buy’
JM Financial has maintained a ‘Buy’ rating on Suzlon Energy with a target price of Rs 64, implying an upside of 30.6% from the current market price of Rs 49. The brokerage’s thesis is built on improving execution and a favourable demand cycle for wind energy.
The report notes that wind generation plays a critical role during evening hours when solar output drops, with around 80% of annual wind generation occurring during the southwest monsoon between May and September. This aligns with the period of expected demand strength.
Suzlon is expected to see a sharp improvement in commissioning in FY27 compared with 270 megawatt in the first half of FY26, which should support cash flows and reduce the gap between deliveries and installations seen earlier.
JM Financial expects incremental wind additions of 8 to 10 gigawatt in FY27, which could drive order inflows and execution visibility for the company over the next few years.
“Wind energy has a strong diurnal complementarity with solar and can support evening demand when solar generation drops,” JM Financial says.
Conclusion
JM Financial’s stock preferences within the power and energy space are tightly aligned with near-term demand trends and supply constraints. Companies with exposure to thermal generation and merchant pricing are positioned to benefit from tighter evening supply, while renewable players with execution visibility remain in focus.
Disclaimer: The analysis and stock ratings presented reflect the views of JM Financial and are for informational purposes only. Readers should note that investments in the power and utility sectors are subject to market risks, including regulatory changes and weather-dependent demand volatility. It is recommended to consult a SEBI-registered investment advisor before making any financial decisions based on these price targets or ‘Buy’ ratings, as individual risk profiles may vary.
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