Regardless of a near-term moderation in electrical energy demand, structural tailwinds similar to vitality transition, rising electrification, and financial development are anticipated to help sustained sectoral momentum.
Peak energy demand in India reached 250GW in FY25 and is projected to the touch 270GW in FY26. Though demand development moderated to ~5% in FY25 (vs. 7–9% in FY22–24) and additional eased to ~2% YoY in April 2025 on account of excessive base results and milder climate, demand volatility in peak months suggests potential for a pointy rebound within the close to time period.
Capability additions in FY25 have been a standout, with complete era capability rising by 33.3GW—a 29% YoY improve. Renewable vitality was the important thing driver, contributing 28.8GW, led by photo voltaic additions of 23.8GW.
Wind vitality contributed the remaining 5GW, demonstrating the sector’s clear pivot towards cleaner sources. Alternatively, thermal capability witnessed a web decline of two.2GW, reflecting India’s gradual shift away from standard energy era.
The Ministry of Energy has taken proactive steps to make sure peak season preparedness. Below Part 11 of the Electrical energy Act, 2003, gas-based energy vegetation have been directed to maximise era throughout summer season months.In the meantime, Grid India will coordinate and notify operational schedules upfront. The transfer features relevance as India decommissioned ~4.4GW of inoperable gas-fired capability, resulting in a pointy decline in operational fuel capability to twenty.1GW in Apr’25 from 24.5GW in Mar’25.Coal availability—a key provide metric—stays stable. In Apr’25, home coal manufacturing rose 3.6% YoY to 81.6MT, with Coal India alone holding 105MT of inventory (+22.1% YoY).
Whole coal stock stood at 125.8MT, providing vital buffer for summer season demand, complemented by authorities efforts to ease provide for imported coal-based vegetation.
On the pricing entrance, common Day-Forward Market (DAM) charges stayed secure at INR5.2/unit in April, whereas Actual-Time Market (RTM) costs dipped 24% YoY in Could (until twenty fifth), helped by unseasonal rainfall and improved sell-side liquidity on IEX.
With a robust pipeline of RE tasks, coverage thrust on thermal reliability, and rising vitality wants, India’s utilities sector is getting into a structurally resilient part.
Progress in energy demand, coupled with increasing clear vitality capability, positions the sector favorably for sustained funding and operational development in FY26 and past.
Suzlon: Purchase| Goal Rs 83
Suzlon Vitality (SUEL) stays our high-conviction choose amid enhancing execution, a web money steadiness sheet and powerful earnings momentum forward. Constructive developments with respect to the implementation of native content material in wind turbine manufacturing will increase market share and defend margins.
We mannequin FY26 supply of two.4GW, implying a quarterly run fee of 600MW, which we consider is affordable (3QFY25 supply: 447MW).
For SUEL, we estimate a CAGR of 46%/51% in income/adj. PAT over FY25-27. As per our understanding, key orders slated for FY26 have already got substantial land acquisitions accomplished and have excessive energy evacuation visibility.
JSW Vitality: Purchase| Goal Rs 592
JSWE reported consolidated income of INR 31.8b in 4QFY25, with adjusted PAT up 34% yoy, aided by increased different revenue and deferred tax advantages. Operational capability reached 12.2GW, with a strong venture pipeline of 6.7GW, reflecting robust development visibility.
Completion of KSK Mahanadi and O2 Energy acquisitions positions JSWE for EBITDA enlargement in FY26. Web era rose 24% yoy, supported by new capacities and excessive thermal PLF of 84%.
With service provider publicity beneath 1GW and coal import dependence decreased to 9–10%, earnings volatility is anticipated to say no. We give a Purchase ranking, backed by clear development visibility and powerful capability additions.
(The writer is Head – Analysis, Wealth Administration, Motilal Oswal Monetary Companies Ltd)
(Disclaimer: Suggestions, strategies, views, and opinions given by consultants are their very own. These don’t characterize the views of the Financial Instances)
