JM Financial picks Adani Power, Tata Power among top summer utility bets

JM Financial identified Adani Power, Adani Green, Tata Power, Torrent Power and JSW Energy as its top five utility picks for the summer, based on a weighted analysis of 16 stocks across utilities and equipment manufacturers.

 

The brokerage said it assigned situational weights to key variables such as valuation, leverage, growth potential, upside, summer demand triggers, earnings quality, investor comfort and volatility, scoring each stock relative to peers.

 

Daily peak power demand is currently hovering at 240-244 Gigawatt (Gw) during daytime and 200-215 Gw in the evening, JM Financial said. Citing forecasts from the World Meteorological Organization and the Asia-Pacific Climate Center, the brokerage noted a potential reversal towards El Nino in the second half of calendar year 2026 (H2CY26), with a 50-60 per cent probability of above-normal temperatures and below-normal rainfall between March and August 2026.

 

 

With maximum temperatures already above normal in most parts of India, incremental peak demand of 50-55 Gw is estimated from cooling requirements, including room air conditioners, indicating peak demand of 275-285 Gw during the day and 260-270 Gw in the evening this summer and into financial year 2027 (FY27).

 

India has added 65 Gw of renewable energy capacity, 4 Gw of hydro, 0.6 Gw of nuclear and 10 Gw of coal-based capacity since May 2024, when peak demand touched an all-time high of 250 Gw. 

 

However, even in an optimistic scenario under power purchase agreements and Section 11 provisions, incremental generation of 27.5 Gw during the day and 17.5 Gw in the evening may fall short of the expected demand increase, raising the probability of evening power deficits.

 

The risk could be higher following a severe 'snow drought' in early 2026, which may adversely impact hydel generation, the brokerage added.

 

Power consumption in the country grew marginally by 1.86 per cent to 132.99 billion units in February from 130.56 BU a year ago, as the use of heating appliances like geysers and blowers slowed down due to higher-than usual temperature. The peak power demand touched an all-time high of about 250 GW in May 2024. The previous all-time peak power demand of 243.27 GW was recorded in September 2023, according to government data.

 

The IMD has said that during March, the maximum temperatures are likely to be normal to below normal over many parts of the country, except northeast and east India, and some parts of the Western Himalayan region and central and peninsular India.

 

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