InCred expects strong Q1 for NTPC, Adani Power amid weak demand; reiterates 'ADD' call
Total energy requirement dropped 1.9 per cent year-on-year (YoY) to 150 billion units (BU), while peak demand touched 243 gigawatts (GW), significantly below the Central Electricity Authority's (CEA) projection of 273GW.
- Jul 11, 2025,
- Updated Jul 11, 2025 4:00 PM IST
India's power sector witnessed a subdued energy demand in June 2025, according to InCred Equities, as milder weather conditions led to a fall in cooling requirements. Total energy requirement dropped 1.9 per cent year-on-year (YoY) to 150 billion units (BU), while peak demand touched 243 gigawatts (GW), significantly below the Central Electricity Authority's (CEA) projection of 273GW. The lower average temperature of 29 degrees Celsius in June, compared to 31 degrees Celsius last year, was a key factor in the decline.
For the first quarter of FY26, energy demand stood at 446BU, down 1.5 per cent YoY, with peak demand slipping 2.7 per cent YoY to 243GW. Regionally, demand showed mixed trends -- while the North saw a 3 per cent YoY fall, and the South and East dropped by 1.7 per cent and 2.1 per cent, respectively, the North-East bucked the trend with a 5.5 per cent YoY increase. Notably, evening peak demand rose 3.8 per cent YoY in June, touching 232GW, indicating persistent load pressures during high-consumption hours.
Power generation in June also reflected the subdued demand, dropping 3 per cent YoY to 158BU. Thermal generation took a hit, falling 10.1 per cent YoY to 109BU, while renewable generation (excluding large hydro) surged 17.1 per cent YoY to 27BU. Wind and solar segments grew 33.1 per cent and 28.7 per cent, respectively, underscoring the continuing shift to clean energy. Installed capacity reached 476GW by May 2025, led by solar (27GW) and wind (5GW) additions.
Merchant power prices cooled significantly amid surplus supply, with Day-Ahead Market (DAM) and Real-Time Market (RTM) prices falling 27.8 per cent and 26.2 per cent YoY, respectively, in June. DAM prices averaged Rs 4.41/KWh in Q1 FY26, down 16.2 per cent YoY. The Indian Energy Exchange (IEX) saw modest volume growth of 6.5 per cent YoY in June and 15 per cent in Q1 FY26, largely driven by strong green market and RTM participation.
Despite weak demand, InCred expects NTPC and Adani Power to report healthy Q1 FY26 results. NTPC's PAT (Profit after tax) is projected to grow 9.4 per cent YoY to Rs 4,934 crore, buoyed by capacity additions. Adani Power's PAT is likely to rise 2.2 per cent YoY to Rs 3,998 crore, supported by new asset acquisitions and short-term contracts. InCred retains an 'ADD' rating on both stocks.
India's power sector witnessed a subdued energy demand in June 2025, according to InCred Equities, as milder weather conditions led to a fall in cooling requirements. Total energy requirement dropped 1.9 per cent year-on-year (YoY) to 150 billion units (BU), while peak demand touched 243 gigawatts (GW), significantly below the Central Electricity Authority's (CEA) projection of 273GW. The lower average temperature of 29 degrees Celsius in June, compared to 31 degrees Celsius last year, was a key factor in the decline.
For the first quarter of FY26, energy demand stood at 446BU, down 1.5 per cent YoY, with peak demand slipping 2.7 per cent YoY to 243GW. Regionally, demand showed mixed trends -- while the North saw a 3 per cent YoY fall, and the South and East dropped by 1.7 per cent and 2.1 per cent, respectively, the North-East bucked the trend with a 5.5 per cent YoY increase. Notably, evening peak demand rose 3.8 per cent YoY in June, touching 232GW, indicating persistent load pressures during high-consumption hours.
Power generation in June also reflected the subdued demand, dropping 3 per cent YoY to 158BU. Thermal generation took a hit, falling 10.1 per cent YoY to 109BU, while renewable generation (excluding large hydro) surged 17.1 per cent YoY to 27BU. Wind and solar segments grew 33.1 per cent and 28.7 per cent, respectively, underscoring the continuing shift to clean energy. Installed capacity reached 476GW by May 2025, led by solar (27GW) and wind (5GW) additions.
Merchant power prices cooled significantly amid surplus supply, with Day-Ahead Market (DAM) and Real-Time Market (RTM) prices falling 27.8 per cent and 26.2 per cent YoY, respectively, in June. DAM prices averaged Rs 4.41/KWh in Q1 FY26, down 16.2 per cent YoY. The Indian Energy Exchange (IEX) saw modest volume growth of 6.5 per cent YoY in June and 15 per cent in Q1 FY26, largely driven by strong green market and RTM participation.
Despite weak demand, InCred expects NTPC and Adani Power to report healthy Q1 FY26 results. NTPC's PAT (Profit after tax) is projected to grow 9.4 per cent YoY to Rs 4,934 crore, buoyed by capacity additions. Adani Power's PAT is likely to rise 2.2 per cent YoY to Rs 3,998 crore, supported by new asset acquisitions and short-term contracts. InCred retains an 'ADD' rating on both stocks.