Power sector set for stronger Q2 earnings as demand rises; NTPC, Tata Power among top picks: Elara Capital

What happened

Elara Capital expects India's power sector to report stronger July-September 2026 quarter earnings as electricity demand, coal offtake and plant utilisation improved. Analyst Rupesh Sankhe favours NTPC, Power Grid and Tata Power, citing higher capacity additions and rising peak demand.

Confirmed

Global impact / market context

Stronger demand and better plant use can lift electricity sales and revenue at utilities, while more assets in service support regulated returns. For investors, this favours established utilities adding renewable capacity over pure renewable firms, since steady cash flows from existing plants fund new spending.

Analyst inference

Peak power demand rising to about 250 GW from 220 GW signals heavier use of the grid, which supports coal offtake and plant utilisation. Capital spending on new capacity and renewable projects becomes a key differentiator, as utilities that fund it internally face less strain on cash available.

Analyst inference

What to watch

1. NTPC's improved plant utilisation and additional generation capacity, plus Power Grid's roughly ₹20,000 crore of asset capitalisation over the past year, which means new assets added to its regulated asset base. Confirmed
2. Elara Capital's expectation that regulated utilities and coal companies will outperform, and that Tata Power will post around 25% earnings growth, are forecasts rather than reported results. Proposed
3. Watch whether peak demand near 250 GW holds, lifting plant utilisation and coal offtake further, and whether utilities' capital spending on renewables translates into revenue without stretching borrowed money. Analyst inference

Evidence

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