Power stocks may rebound on demand recovery, attractive valuations

Power stocks, down over 22 per cent in the past year, may see renewed interest in H2FY26 as demand recovers, coal capacity expands and renewable additions accelerate

Utilities in the power sector present an interesting investment case at this moment. Most power stocks have lost substantial ground in the past 12 months. FY25 results were moderate and Q1FY26 results were poor, with lower-than-expected peak and base demand.

 

A recovery in demand in H2FY26 could trigger investment interest at current, reduced valuations.

 

Amidst long-term trends, there are plans to increase coal thermal capacity and also a pickup in battery energy storage systems or BESS (and pumped storage plants or PSP) to meet long-term peak demand as more intermittent renewable capacity is wheeled onto grids. The dependence on external