NTPC, JSW Energy, Power Grid, others: Should you Buy, Sell or Hold the power stocks ahead of Q1 results?

Stock Market Today: NTPC Ltd, Power Grid Corporation of India Ltd, JSW Energy Ltd, Torrent Power, GVK Power and Infrastructure , BHEL and others share prices have remained in focus with strong rise in power demand. While Power Grid Corporation share price has risen 90% is a year, NTPC Ltd, JSW Energy Ltd, Torrent Power, GVK Power BHEL share prices have given Multibagger returns to the investors having gained up to 270% during last one year.

The investor and analysts confidence remains strong on the sector companies looking at the regular rise in power demand, improving earnings outlook.

During the quarter gone by (April- June 2024 quarter) analysts at Elara Securities expect utilities companies under their coverage to report 6% YoY revenue growth, 2% YoY growth in earnings before interest, tax, depreciation and amortisation (Ebitda). Net profit is expected to rise 5% despite high base of last year.

NTPC and Power Grid Corporation as per Elara analysts would post healthy quarter on assured returns on regulated asset.

Power generation registered 11% YoY growth to 490 billion units in Q1FY25 amidst severe heatwave conditions that impacted many regions in the country.

Peak demand surged to an all-time high of 250GW in May, rising 13% YoY and surpassing peak demand of 243GW registered in September 2023. The expectations of Central Electricity Authority (CEA) remain that peak demand will touch 260GW in FY25.

As per Jefferies India Ltd June 2024 power demand growth was healthy at 8% YoY, while 1QFY25 power demand rose 11% YoY, ahead of their 7% YoY power demand growth estimate for FY25.

NTPC, JSW Energy and Power Grid remain top picks of Jefferies amongst Utilities.

SJVN would also benefit on improved hydro generation. Hydro generation is also likely to remain in spotlight during the ongoing quarter (July- September quarter) helped by monsoon season.

Exchange volume momentum that persists would be advantageous to IEX (India Energy Exchange), Also prospects of companies like Torrent power earnings would be driven by robust gas-based power demand.

With ongoing policy changes and fresh efforts implemented under Modi 3.0, we are still optimistic about the industry, said Elara analysts. The industry would continue to grow as a result of growing capacity addition, rising power consumption, and the introduction of green hydrogen and storage solutions.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions