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India’s power sector continued to grapple with subdued demand and lower thermal plant utilisation in the March quarter of financial year 2026, even as select utilities are expected to deliver steady earnings growth, according to Nuvama Institutional Equities. The brokerage maintained a cautious near‑term outlook on the sector but reiterated NTPC Ltd and CESC Ltd as its top stock picks.
Power demand rose just 0.7 per cent year‑on‑year in March 2026, reflecting the broader weakness seen through the quarter. For the full fourth quarter of financial year 2026 (Q4FY26), demand grew 1.9 per cent year‑on‑year, while full‑year demand remained largely flat at 0.8 per cent year‑on‑year, affected by an extended monsoon and a delayed onset of summer.
“India’s power demand remained muted for yet another quarter, with extended monsoon and a slow start to summer adding to the pressure,” Nuvama said in its note.
Peak power demand during the quarter increased to around 245 gigawatts, up from about 238 gigawatts a year ago. However, thermal plant performance remained subdued, with the average thermal plant load factor (PLF) falling to around 69.8 per cent, compared with 73.4 per cent in the year‑ago period.
Muted PLFs to Cap Earnings Growth
Lower utilisation levels are expected to weigh on profitability across most power utilities. Nuvama expects its power coverage universe to post only modest profit‑after‑tax growth in Q4FY26. “We forecast modest profit growth across our power coverage universe, led by subdued thermal PLFs and weak power demand,” the brokerage said.
CESC, NTPC Likely To Outperform
Against this challenging backdrop, Nuvama highlighted CESC Limited and NTPC Limited as the best‑placed names in the sector. CESC is expected to post a strong earnings performance in the March quarter, supported by operational efficiency at its Haldia power plant. “CESC, on the back of strong plant load factor at Haldia, is expected to post profit growth of around 30 per cent year‑on‑year,” the brokerage said.
NTPC, meanwhile, continues to benefit from capacity additions and regulated asset growth. The NTPC group added around 9.4 gigawatts of capacity in financial year 2026, translating into an estimated 7 per cent increase in regulated equity, which underpins earnings visibility for the state‑owned utility.
The exchange is expected to post strong revenue growth, driven by rising volumes. “Indian Energy Exchange is expected to deliver strong top‑line growth, led by electricity volume growth of over 20 per cent year‑on‑year,” Nuvama said.
Total electricity volumes on the exchange rose 23.5 per cent year‑on‑year in March and 24 per cent in Q4FY26, while overall volumes, including renewable energy certificates, grew 21 per cent year‑on‑year for the quarter, aided by strong growth in the real‑time market.
Coal Stocks and Renewable Pipeline
Coal availability remained adequate during the quarter, with coal stock at NTPC’s plants standing at around 20 days of consumption in March, supported by inventory levels of nearly 59 million tonnes.
Meanwhile, the renewable energy tendering pipeline remains robust. As of March 2026, cumulative tender announcements stood at approximately 368 gigawatts, with solar and storage projects accounting for nearly 65 per cent of the total. Total renewable energy capacity addition for the year‑to‑date period was estimated at around 43 gigawatts, the brokerage said.
