Adani Power or NTPC? Macquarie initiates coverage on 3 power stocks, hikes target prices for 3 others

While much of India grapples with soaring temperatures, shareholders of power companies are benefiting from rising electricity demand. International brokerage Macquarie says India’s power sector is undergoing a broad-based regulatory and operational reset across generation, transmission and distribution.

Macquarie initiated coverage on JSW Energy with an ‘Outperform’ rating and a target price of Rs 720 per share, implying an upside potential of more than 28% from the stock’s previous close.

The brokerage also initiated coverage on Adani Power and Adani Energy Solutions with ‘Neutral’ ratings. It assigned a target price of Rs 230 per share to Adani Power, implying an upside of about 4%, and Rs 1,450 per share to Adani Energy Solutions, implying a downside of around 6%.

NTPC emerged as Macquarie’s top pick in the sector, followed by JSW Energy, Power Grid, Adani Green, Adani Power and Adani Energy Solutions. The brokerage raised its target price on NTPC to Rs 480 per share, indicating an upside potential of 36.5% from the previous closing price.

Macquarie also sees strong upside in Power Grid, raising its target price to Rs 400 per share, implying upside potential of about 39%. It also increased its target price for Adani Green to Rs 1,700 per share, indicating an upside of nearly 15%.

India’s power sector is undergoing dual-track evolutions

According to Macquarie, India’s power sector is evolving along two parallel tracks — coal continues to anchor baseload stability, while renewables drive incremental capacity growth.

This transition is expected to support an expansion in installed capacity from 538 GW currently to 900 GW by FY32. However, achieving this scale will require rapid deployment of 74 GW of energy storage to manage intermittency and meet peak evening demand.

“Peak power demand touched a record 271 GW in May 2026, leaving minimal supply headroom and highlighting grid stress despite adequate base capacity,” Macquarie noted.The Central Electricity Authority (CEA) expects power demand to grow at a 6% CAGR through 2030, supported by strong industrial activity, which accounts for roughly half of demand, structurally rising cooling requirements contributing more than 20% of incremental growth, and emerging high-load segments such as data centres and electrified transport.

Macquarie believes this will intensify pressure across both generation and transmission infrastructure.

The brokerage expects India to enter a transmission-led capex cycle, with an estimated US$51 billion investment requirement through FY36 to bridge the geographic mismatch between renewable-rich states and major consumption centres.

It also highlighted a structural execution gap: generation assets can typically be built in 12–18 months, while transmission infrastructure often takes 36–48 months, necessitating proactive corridor development.

Grid curtailment remains a key risk. Macquarie pointed to the loss of 2,300 GWh in late 2025, when midday solar generation exceeded the grid’s absorption capacity.

Indian discoms on the path to recovery

Macquarie also noted that India’s distribution companies (discoms) are showing signs of recovery, supported by RDSS-led investments and smart metering initiatives.

Improved billing efficiency, lower leakages and a reduction in overdue payments under the Late Payment Surcharge (LPS) mechanism indicate materially stronger financial health than in previous years, it said.

The brokerage added that regulatory tailwinds remain supportive.

“The Draft National Electricity Policy 2026 signals a fundamental shift toward market-based systems, repositioning coal as a flexible balancing resource rather than a rigid baseload source. Legislative reforms such as the Electricity (Amendment) Bill 2026 and the Digital India Energy Stack aim to improve discom finances and enable peer-to-peer electricity trading,” Macquarie said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)