Tata Power to Adani Green: Why are experts bullish on power stocks despite stock market crash?

Stocks to buy today: Amid high volatility in the Indian stock market, experts are betting high on power sector stocks. They believe India's power demand is expected to increase from March to May 2025 from 220 GW to 270 GW. They said that the Indian government is trying its best to meet the rising power demand through renewable energy. Still, it would certainly add value to the balance sheet of some quality power companies. As market discounts before the event, they advised medium-term investors to buy some of the quality power sector shares like Tata Power, Adani Green, Adani Power, etc.

Triggers for power stocks

On triggers working in favour of power stocks despite weak sentiments on Dalal Street, Vikas Gupta, Smallcase Manager and Founder at OmniScience Capital, said, "The power theme has been on our radar for quite some time, and we are quite optimistic on the theme, due to severe mispricing in several stocks in the sector. To invest in the theme, we look at the whole ecosystem, starting from generators, distributors, trading, capital equipment, construction and EPC, other services, and finance. From this, we see several attractive power generation companies mispriced given their capital work in progress, which will significantly increase their revenue and earnings over the next few years."

"India's power demand continues to rise, driven by seasonal and structural factors. The peak power demand is expected to touch 270 GW in the summer of 2025, fueled by rising temperatures and increased use of cooling systems. But beyond the seasonal spike, there's a bigger shift underway. India is expanding its total power capacity from 426 GW to 618 GW by 2028, with a major chunk—170 GW—coming from renewables like solar and wind," said Krishna Appala, Sr. Analyst at Capitalmind Research.

Pointing towards the fast-approaching summer season, Palak Devadiga, Research Analyst at StoxBox, said, “Temperatures are further expected to rise in the coming months, increasing the utilization of air conditioners and coolers. This increased usage will ultimately drive up energy costs, leading to higher revenue and profitability for power companies. While the sector is poised to benefit from the increased demand, individual company performance depends on cost management, operational efficiency and financial health. Keeping these factors in mind, we recommend that investors look into company-specific fundamentals and macroeconomic factors before investing in power stocks.”

Krishna Appala of Capitalmind Research said the Government of India's (GoI's) Aatma Nirbhar Bharat push is adding fuel to the fire, with ₹24,000 Cr allocated for domestic solar manufacturing and significant investments in solar parks and floating solar projects. India is making a serious bet on clean energy, aiming to cut carbon emissions by 1 billion tonnes by 2030 and go net zero by 2070. Given this strong policy push and growing electricity consumption, some power stocks look attractive, especially after the recent market correction. We remain positive on the power utilities space, particularly on companies with a strong foothold in transmission and distribution, as they are best positioned to ride this wave of change.

Stocks to buy today

On power stocks to buy today, Anshul Jain, Head of Research at Lakshmishree Investment and Securities, said, “Short to medium-term investors can look at buying shares of Tata Power, Adani Green, and Adani Power. One can initiate momentum buying in Tata Power shares at the current market price for two to three months with a target of ₹400. However, one must maintain a stop loss below ₹335. Likewise, one can buy Adani Green shares at CMP for the target of ₹900, maintaining stop loss at ₹800 apiece. One can buy Adani Power shares at CMP for ₹589, maintaining a stop loss at ₹470.”

Stock market crash

After hitting a record high on 26 September 2024, the Indian stock market has remained under the sell-off heat. The Nifty 50 index has crashed from the record high of 26,277 to 22,450, the BSE Sensex from 85,978 to around 74,000, and the Bank Nifty index from 54,467 to around 47,225. 

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.