While the US-Iran war has been causing tremors across the board in the Indian equity market, there are a few players reaping the benefits. Shares of several utility and power companies, for instance, went over the roof and were the top performers on Thursday in an otherwise weak market.
The BSE Power closed at its highest level in 14 months at 7,057.01 points. The index as well as the BSE Utilities were the top sectoral gainers, up around 3% each. Stock-specific toppers in the pack were Adani Power, followed by JSW Energy, power plant equipment maker Bharat Heavy Electricals (BHEL), and Torrent Power which ended 5-7% higher on the BSE.
During the day, Adani Power had risen over 9% to hit an intra-day high of ₹152 before closing at ₹149.10. The second-most gainer, JSW Energy, increased 8% and then closed 6% higher at ₹518.40. The remaining two, BHEL and Torrent Power, had each risen around 5.5% before closing at ₹267.90 and ₹1,501.30, respectively.
Power Rally
The anticipation of massive power demand and a likely “double-digit percentage rise” in prices due to the liquified petroleum gas (LPG) shortage have turned investors towards the sector. Supporting catalysts are the summer season and rising focus towards data centres. There are also expectations that the government may implement Section 11 of the Electricity Act, 2003 or any other mechanisms to operationalise imported coal-based power plants.
“Energy market developments and geopolitical issues in the Middle East are pushing investors toward domestic energy companies considered safer bets,” said an analyst who did not want to be named. Foreign as well as domestic institutional players are heavily investing in energy stocks in hopes of high demand, the analyst added.
On Tuesday at 1900 IST, evening power demand hit the highest-ever recorded for March, up 7% at 224.6 gigawatt (GW), the brokerage house said. There is a higher probability of persistently high liquified natural gas (LNG) prices and intense summer leading to a spike in coal-fired generation to meet evening demand, JM Financial said in its report.
During these non-solar hours, power supply was supported by renewable sources. The utilisation of coal energy was 95%, nuclear was 87%, hydro energy was 67%, and gas was 28%, as per the report. With deficits anticipated in gas and hydro, JM Financial expects higher plant load factors PLFs for thermal utilities and the coal value chain.
Energy Security
Market experts also believe that energy security will be one of the predominant matters in India over the next 5-10 years. Structurally, fundamentals are improving for the power distribution space as it is no longer making losses. Pankaj Pandey, head of research at ICICI Securities, said, “If we are able to pass the Electricity Amendment Bill, some of the challenges can be mitigated in discoms,” he added. The Bill was introduced in 2025 with an aim to modernize the power sector by promoting competition, strengthening renewable energy compliance, and enabling financial viability for discoms.