Suzlon, Tata Power, Premier, Emmvee, NTPC Green: Check target prices for power stocks

Battery energy storage system, or BESS, prices in India have risen by about US$15/kWh in recent months to around US$80/kWh on a landed, post-duty DC container basis, sharply slowing procurement, according to Ambit Institutional Equities. Ambit said the industry now expects only about 5GWh of incremental installations in FY27, taking cumulative installed capacity to 13-15GWh, well below the Central Electricity Authority’s 23GWh target.

Ambit said the slowdown reflects a broader market reset after aggressive bidding, weak understanding of battery lifecycle economics and delays in manufacturing execution. It added that lower BESS commissioning in FY27 poses a risk for solar players because of curtailment, while delays in domestic manufacturing are negative for specialty chemicals companies.
 

Installations slower than expected
Ambit said Adani has already commissioned 3.37GWh of BESS at Khavda, described in the report as the world’s second-largest single-site BESS installation. This accounts for the bulk of India’s current installed base of about 8.5GWh. The company is developing another 11GWh, though Ambit said commissioning is more likely in FY28.
 

Aggressive bids meet execution challenges
According to Ambit, several developers bid aggressively without fully accounting for battery degradation, cycle life, auxiliary consumption and lifecycle management requirements. It said BESS economics are more complex than solar, making operating assumptions critical. Ambit said the CEA is considering stricter technical qualification norms for future tenders, while Maharashtra and Rajasthan are evaluating re-tendering of some projects. The government is also considering an additional 40GWh of viability gap funding support with 40-50% domestic-content requirements.
 

FDRE projects and merchant returns
Ambit said most BESS projects tied to firm and dispatchable renewable energy projects are likely to be commissioned only in FY28, with some winning bidders yet to place procurement orders. It said commissioning cannot move ahead of the FDRE power purchase agreement deadline unless the grid station is available.

While BESS capital costs are lower in FDRE projects because storage can share pooling substations with solar and wind assets, that benefit does not apply to standalone projects. Ambit noted industry calls to remove the Rs10/kWh exchange price cap, with some projects reportedly earning close to Rs20/kWh under Grid India’s TRAS procurement, but said merchant arbitrage is unlikely to remain sustainable and long-term returns will depend on stacked revenue streams.

Manufacturing delays continue
Ambit said execution across production-linked incentive-awarded cell projects has been slower than expected. Reliance has sought a two-year extension, Ola has asked for timeline and capacity changes, and Exide has commissioned capacity though commercial shipments remain limited.

Technology-transfer issues, a steep learning curve and weaker-than-expected offtake have driven delays, it said. Ambit added that domestic pack capacity is estimated at 50-200GWh, while cell capacity plans have been repeatedly delayed. It also highlighted Amara Raja’s phased approach, starting with an assembly and pack line and a Rs10 billion customer qualification plant before placing equipment orders for a GW-scale plant.

Lifecycle risk remains key
Ambit said battery lifecycle performance remains one of the industry’s biggest uncertainties. Cells are typically validated for about 2,000 laboratory cycles, while some manufacturers are marketing products for 10,000 cycles with warranties of up to 20 years, even as long-term field performance remains largely untested.

It added that discussions are increasingly turning to sodium-ion batteries after CATL launched its TENER sodium-ion ESS products. Ambit also said weaker power demand growth over the past two years may reverse if heatwave risks rise, potentially reviving renewable energy and transmission tendering, though it sees limited room for fundamental upside in most valuations.

Stocks and target prices
Ambit has a 'buy' rating on Suzlon Energy (Target Price: Rs 62), NTPC (Target Price: Rs 410), Emmvee Photovoltaic (Target Price: Rs 345) and Saatvik Green Energy (Target Price: Rs 520). However, it has given a 'sell' tag for Tata Power (Target Price: Rs 405), Torrent Power (Target Price: Rs 1,255), Power Grid (Target Price: Rs 290), NTPC Green (Target Price: Rs 85), JSW Energy (Target Price: Rs 525) and Premier Energies (Target Price: Rs 945).