E-Paper11 power stocks including Adani Green Energy, NHPC gained between 20% and 110% in 3 months; check full list
Rising power consumption in India, fueled by economic rebound, cold wave, and low rainfall, has led to a 7.5% increase in electricity usage. The government anticipates a surge in demand to 384 GW by March 2032. 11 power stocks have posted gains ranging from 20% to 110% over the past three months.
Power consumption in India has experienced robust growth, fueled by a resurgence in economic activities, particularly driven by strong industrial demand.
Following the disruption caused by the COVID-19 pandemic, economic activities bounced back strongly, leading to strong usage of power. Additionally, the cold wave led to heightened use of heating appliances like heaters, blowers, and geysers and the low rainfall due to El Nino conditions forced increased use of pumps for irrigation, further driving up the power demand.
According to the latest government data, power consumption in the country has risen to 1354.97 billion units (BU) during the April-January period of this fiscal year, marking a 7.5% increase from 1259.49 BU recorded during the same period in fiscal year 2022–23.
The significant increase in power demand has prompted the government to revise its projections for electricity consumption.
Last year, peak demand soared to 243 gigawatts, exceeding initial projections of 229 gigawatts by the power ministry. In response, India unveiled plans in December to add nearly 88 gigawatts of new thermal power capacity by early 2032, with coal-fired plants accounting for the majority. This represents about two-thirds more capacity than previously planned.
11 stocks soar up to 110%
The strong surge in power consumption has driven the stock prices of companies within the power sector, including power generators, distributors, and financing firms, to record highs.
Furthermore, the expansion into renewable energy (RE) projects, the new-age business of green hydrogen, solar module manufacturing, and heightened capacity utilisation due to robust demand have contributed to the upward momentum in stock prices.
Against this backdrop, 11 power stocks have posted gains ranging from 20% to 110% over the past three months. Leading the pack is Adani Green Energy, soaring by 110%. Other Adani group stocks like Adani Energy Solutions and Adani Power have surged by 54.2% and 41%, respectively.
Meanwhile, PSU stocks such as NHPC, SJVN, Power Grid Corporation of India, NTPC, REC, and Bharat Heavy Electricals have also witnessed notable returns of 63.7%, 48%, 38.3%, 31.9%, 30%, and 49.8%, respectively. Additionally, Tata Power and JSW Energy have seen impressive gains of 45% and 22.5%, respectively.
Renewable energy will play a key role
In recent years, India has been making significant strides in transitioning from coal-based power to renewable energy sources. While coal still remains a major component of India's energy mix, the country has been actively expanding its renewable energy capacity to reduce its reliance on fossil fuels and combat climate change.
According to credit rating agency firm ICRA, India's installed renewable energy (RE) capacity, excluding large hydroelectric plants, is estimated to increase to 170 GW by March 2025 from a level of 135 GW in December 2023.
Currently, the country holds the 4th position globally for installed renewable energy capacity, including large hydro. It ranks fourth in both wind power capacity and solar power capacity.
The government has also taken steps to increase nuclear power capacity to 22,480 MW by 2031–2032, a significant increase from the current capacity of 7480 MW. The government is in talks with at least five private firms, including Reliance Industries, Tata Power, Adani Power, and Vedanta, to invest around ₹44,000 crore each, news agency Reuters reported on February 20.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
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