Speaking on the sidelines of the JPMorgan India Conference, Atul Tiwari, Head of India Industrials, Electric Utilities and Infrastructure Research at JPMorgan, said, “As far as equipment suppliers are concerned, there we do feel that stocks are quite expensive. Market is factoring in that opportunity, and we are more comfortable playing this opportunity through some of the largercap electricity generation utilities on the regulated side. Because there the valuations are now quite comfortable and provide enough upside with fairly defensive business model.”
Power demand has grown around 10-12% since March, although some of the increase is seasonal. On a longer-term basis, demand growth is running above the historical average of around 5%.
Tiwari said the demand outlook should create opportunities for power generators, transmission companies, renewable energy firms and equipment suppliers. However, valuations are a key differentiating factor across these segments.
While JPMorgan prefers largecap regulated utilities, the brokerage also sees opportunities among select smaller power generation companies.
Some smaller generators are supplying power directly to commercial and industrial customers, including data centers. These companies could benefit from the growing requirement for reliable power as data center capacity expands.
Another opportunity is emerging from the gap between daytime and evening power prices. Higher merchant power prices during non-solar hours can benefit generators with greater exposure to the merchant market.
Large utilities, however, have limited exposure to this opportunity because much of their capacity is tied to long-term power purchase agreements (PPAs).
Smaller companies with battery storage capacity could have greater flexibility to take advantage of price differences between daytime and evening hours.
Private corporate capex among India’s top 1,000 companies has grown at 10 to 11% year-on-year in the 2026 financial year, aligning with nominal gross domestic product growth.
Pockets such as thermal power, renewable transmission, and semiconductors are showing a strong pipeline. This momentum is expected to build over the next two to three years.
On the public infrastructure front, central government capital expenditure grew by 25 to 30% year-on-year in the first four to five months of the financial year, though this is expected to normalise to a 10 to 12% growth rate over the full year.
A major driver of this investment is the expansion of data centers, with industry estimates projecting operational capacity to surge from 1.5 gigawatts to between 8 and 9 gigawatts over the next four to five years. This capital-intensive shift creates substantial opportunities for suppliers of power backup, generator sets, and cooling equipment.
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