Suzlon Energy, BHEL, Inox Wind: JM sees strong Q1 for power cos; check target prices
JM Financials' has shared a comprehensive preview of the power and utilities sector's performance for 1QFY26, highlighting both challenges and growth opportunities.
- Jul 10, 2025,
- Updated Jul 10, 2025 12:01 PM IST
In the first quarter of Fiscal Year 2026, power demand has shown a slight decline according to JM Financials. The energy requirement stood at 447 billion units (BU), down 1% year-on-year, while peak demand reached 242 gigawatts (GW), a 3% decrease year-on-year. This reduction has been attributed to early monsoon conditions across the country, which simultaneously boosted hydro generation by 13% year-on-year.
Solar and wind energy sectors continue their upward trajectory, with growth figures at 18% and 31% respectively. However, the overall subdued demand has resulted in a moderation of the plant load factor (PLF) for thermal power plants, which decreased to 69% in 1QFY26 from 76% in the same period last year. Merchant tariffs also witnessed a decrease to INR 4.4 per kilowatt-hour, a 16% drop year-on-year.
On a notable day, 25 May 2025, real-time merchant prices dropped to zero during solar hours, marking a first in the sector. Despite the subdued demand, JM Financials anticipates that utilities will report a moderate quarter with a flat topline and a slight improvement in EBITDA for 1QFY26.
JSW Energy is expected to demonstrate a significant 50% year-on-year growth in generation, primarily driven by inorganic growth. Similarly, NHPC and SJVN are likely to showcase favourable growth due to the higher hydro generation results in the quarter.
BHEL, Suzlon, and Inox Wind are anticipated to report positive performance driven by increased dispatches and operating leverage. These companies seem to be benefitting from a gradual pick-up in execution of their power order books, according to JM Financials' projections.
The outlook for NTPC suggests a moderate quarter, with a predicted revenue decline of 4% year-on-year to INR 465 billion, and an EBITDA increase of 5%. Meanwhile, Power Grid's net sales are expected at INR 113 billion, with a robust EBITDA margin of 87.2%.
Coal India is expected to report a revenue decrease of 2% year-on-year due to lower dispatches, while Tata Power's net sales may remain relatively stable with a projected EBITDA margin around 19.5%. Suzlon’s revenue is projected to increase by at least 60% year-on-year, driven by higher dispatches.
Other notable projections include BHEL's expected revenue increase of 26% year-on-year, and a 60% anticipated revenue growth for JSW Energy, influenced by acquisitions such as KSK Mahanadi and O2 Power. Furthermore, NHPC and SJVN are expected to report revenue growth of 11% and 8% year-on-year respectively due to improved hydro generation.
Finally, companies like Torrent Power may experience a revenue decline due to reduced generation in gas-fired plants, while Inox Wind's revenue is poised to grow by 36% year-on-year due to increased realisations. In contrast, ACME Solar anticipates a 66% increase in revenue as capacity rises significantly.
JM Financial has a 'sell' rating on only SJVN with a target price (TP) of 75 per share. It has suggested to 'hold' Coal India and Torrent Power with target prices of Rs 376 and Rs 1,382. It has suggested to 'buy' NTPC (TP: 390), Power Grid (TP: 353), Tata Power (TP: 376), Suzlon (TP: 81), BHEL (TP: 281), JSW Energy (TP: 543), NHPC (TP: 100), Inox Wind (TP: 216), CESC (TP: 194), IEX (TP: 231) and ACME Solar (TP: 270).
In the first quarter of Fiscal Year 2026, power demand has shown a slight decline according to JM Financials. The energy requirement stood at 447 billion units (BU), down 1% year-on-year, while peak demand reached 242 gigawatts (GW), a 3% decrease year-on-year. This reduction has been attributed to early monsoon conditions across the country, which simultaneously boosted hydro generation by 13% year-on-year.
Solar and wind energy sectors continue their upward trajectory, with growth figures at 18% and 31% respectively. However, the overall subdued demand has resulted in a moderation of the plant load factor (PLF) for thermal power plants, which decreased to 69% in 1QFY26 from 76% in the same period last year. Merchant tariffs also witnessed a decrease to INR 4.4 per kilowatt-hour, a 16% drop year-on-year.
On a notable day, 25 May 2025, real-time merchant prices dropped to zero during solar hours, marking a first in the sector. Despite the subdued demand, JM Financials anticipates that utilities will report a moderate quarter with a flat topline and a slight improvement in EBITDA for 1QFY26.
JSW Energy is expected to demonstrate a significant 50% year-on-year growth in generation, primarily driven by inorganic growth. Similarly, NHPC and SJVN are likely to showcase favourable growth due to the higher hydro generation results in the quarter.
BHEL, Suzlon, and Inox Wind are anticipated to report positive performance driven by increased dispatches and operating leverage. These companies seem to be benefitting from a gradual pick-up in execution of their power order books, according to JM Financials' projections.
The outlook for NTPC suggests a moderate quarter, with a predicted revenue decline of 4% year-on-year to INR 465 billion, and an EBITDA increase of 5%. Meanwhile, Power Grid's net sales are expected at INR 113 billion, with a robust EBITDA margin of 87.2%.
Coal India is expected to report a revenue decrease of 2% year-on-year due to lower dispatches, while Tata Power's net sales may remain relatively stable with a projected EBITDA margin around 19.5%. Suzlon’s revenue is projected to increase by at least 60% year-on-year, driven by higher dispatches.
Other notable projections include BHEL's expected revenue increase of 26% year-on-year, and a 60% anticipated revenue growth for JSW Energy, influenced by acquisitions such as KSK Mahanadi and O2 Power. Furthermore, NHPC and SJVN are expected to report revenue growth of 11% and 8% year-on-year respectively due to improved hydro generation.
Finally, companies like Torrent Power may experience a revenue decline due to reduced generation in gas-fired plants, while Inox Wind's revenue is poised to grow by 36% year-on-year due to increased realisations. In contrast, ACME Solar anticipates a 66% increase in revenue as capacity rises significantly.
JM Financial has a 'sell' rating on only SJVN with a target price (TP) of 75 per share. It has suggested to 'hold' Coal India and Torrent Power with target prices of Rs 376 and Rs 1,382. It has suggested to 'buy' NTPC (TP: 390), Power Grid (TP: 353), Tata Power (TP: 376), Suzlon (TP: 81), BHEL (TP: 281), JSW Energy (TP: 543), NHPC (TP: 100), Inox Wind (TP: 216), CESC (TP: 194), IEX (TP: 231) and ACME Solar (TP: 270).