Tata Power, NTPC, IEX, CESC, PTC India, SJVN, Adani Energy shares offer up to 39% potential upsides

Elara Securities in its latest note said it sees strong investment potential in regulated firms, as well as in renewable and hydro power companies. The domestic brokerage said power companies under its coverage are pursuing aggressive capacity expansion, especially in the renewables sector. NTPC Ltd has 14.6GW of renewables under construction, while JSW Energy is building 9.7GW, it said noting that NLC India aims to scale its renewable capacity from 1.4GW to 10.0GW by FY30. 

"Tata Power Company Ltd has set a goal of achieving 70% of overall capacity from renewables by FY30.  NTPC is also emerging as a major player in the nuclear segment, with plans to develop 30GW out of the government’s ambitious 100GW nuclear energy target by FY47," it said.

Elara Securities said it prefers regulated PSU companies,  such as NTPC and Power Grid Corporation (PGCIL), due to assured returns from regulated assets and robust capacity  addition pipeline. We also favor Indian Energy Exchange Ltd (IEX), given the rising share of short-term power markets in  India and increasing dominance of power exchanges. 

CESC offers potential upside, driven  by its significant renewable capacity expansion targets while NLC India appears attractive with plans to double its regulated equity by FY30, Elara Securities said. In the long term, the hydro sector looks promising, due to upcoming capacity addition and renewed focus on the industry, the brokerage said.

Elara has a target price of Rs 462 on NTPC, suggesting a 38.7 per cent potential upside. It sees 36 per cent upsides each on NLC India and CESC. On NHPC, Elara suggested a target of Rs 118, up 32.6 per cent potential upside. Elara sees 26 per cent upside each on SJVN and Tata Power. The broking firm also sees over 20 per cent upside each on PTC India and JSW Energy. 

Elara said peak power demand has exhibited a  robust upward trajectory in the past decade, posting a CAGR of 5 per cent during FY15-25. This  surge was driven by robust economic activity, rising temperatures, and greater air-conditioner penetration. However, signs of moderation are emerging from FY25. Growth  in peak demand slowed to a mere 3 per cent YoY, reaching 249.8GW for FY25. Although peak  demand reached a record high of 249.8GW in May 2024, it fell short of CEA’s Summer  projection of 270GW in May 2025, with peak demand declining by 8% YoY to 231.0GW, it said.