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  • India's power sector profits likely to grow up to 11% in Q2FY27 on strong demand: Report

    India's power sector profits likely to grow up to 11% in Q2FY27 on strong demand: Report

    • Published On Oct 13, 2026 at 02:55 PM IST
    India's power sector profits likely to grow up to 11% in Q2FY27 on strong demand: Report 
    India’s power sector profits likely to grow up to 11% in Q2FY27 on strong demand: Report 

    New Delhi: India’s power sector is expected to post up to 11 per cent year-on-year (YoY) profit growth in Q2FY27, driven by strong electricity demand, higher plant load factors and potential incentives for thermal power producers, according to Nuvama Institutional Equities.

    Nuvama noted in its report, India’s power demand rose nearly 12 per cent YoY to 163 billion units (BU) in September 2026 and 11.7 per cent to 503 BU in Q2FY27. This was largely due to high humidity and lower average rainfall.

    On the other hand, “peak power demand surged ~17.5% YoY to 269GW in Sep-26, led by non-solar hour demand.”

    Meanwhile, India’s thermal power accounted for nearly 69 per cent of total generation in Q2FY27, with plant load factors (PLFs) rising to 68.3 per cent from 61.9 per cent in Q2FY26.

    Apart from this, tighter power supply pushed electricity prices higher on the Indian Energy Exchange (IEX), with solar-hour prices remaining elevated. Additionally, non-solar-hour prices also increased in September on YoY basis.

    “Tighter supply pushed IEX prices higher, with solar-hour prices remaining elevated at INR5.6/unit and non-solar prices surging to INR9.5/unit in Sep-26 from Rs 3.2/unit in Sep-25,” it said.

    Nuvama further noted, electricity trading volumes on IEX rose 10.4 per cent YoY in September 2026 and 12.7 per cent in Q2FY27, with solar-hour prices averaging around Rs 3.8 per kWh during the quarter.

    However, total trading volumes, including Renewable Energy Certificates (RECs), grew nearly 9 per cent year-on-year in September, while quarterly growth remained subdued at around 4 per cent.

    At the same time, “Coal stock at NTPC‘s plants was down to about seven days in Sep-26 with low inventory of ~21MT (-54% YoY),” which further indicated a “tight” coal supply situation in the country.

    “Total RE additions stood at ~16.4GW YTD (till Sep-26) with solar additions contributing ~14.3GW in YTDFY27,” it said.

    Overall, as per the brokerage house, “IEX is expected to post moderate growth with overall volume rising merely 4% in Q2FY27.”

    Meanwhile, major thermal power producers are expected to report 8-9 per cent year-on-year profit growth, supported by higher plant load factors (PLFs) and potential incentives.

    • Published On Oct 13, 2026 at 02:55 PM IST

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  • India's power transmission expansion, data centre demand to drive capital goods growth: Report

    India's power transmission expansion, data centre demand to drive capital goods growth: Report

    • Published On Oct 12, 2026 at 12:50 PM IST
    India’s expanding transmission network and rising data centre capacity are expected to boost demand for HVDC systems and power equipment.
    India’s expanding transmission network and rising data centre capacity are expected to boost demand for HVDC systems and power equipment.

    India’s expanding power transmission network and rising demand from data centres are expected to create significant opportunities for the engineering and capital goods sector, with High-Voltage Direct Current (HVDC) technology emerging as an important growth driver, according to a report by 360 ONE Capital.

    The report highlighted that rising renewable energy integration, grid modernisation and increasing electricity requirements from data centres could support demand for power equipment over the coming years.

    However, project delays, higher input costs and uncertainty around global investment in artificial intelligence infrastructure could affect the pace of growth.

    “India’s HVDC capacity is expected to increase from 34.5 GW in FY27 to 55 GW by FY32, with a further 78 GW of HVDC pipeline identified by CEA till FY36,” the report said.

    It noted that HVDC projects are becoming increasingly important as India expands its transmission infrastructure to integrate renewable energy and strengthen the power grid. The report also pointed to the sector’s relatively concentrated supplier base and the importance of successfully executing projects to qualify for future orders.

    Data centres are another potential source of demand. India’s data centre capacity remains below 2 gigawatts, while the report expects it to reach 13-18 gigawatts by 2030. These facilities require reliable power supply and advanced grid equipment, including transformers, switchgear and grid management systems.

    The report estimated that equipment suppliers could address a meaningful share of data centre investment, creating an additional opportunity alongside conventional transmission projects. Growing electricity demand and the expansion of digital infrastructure could therefore broaden the sector’s growth drivers beyond traditional utility spending.

    Manufacturing capacity expansion and greater domestic production of specialised transmission equipment are also expected to support the sector. The report said localisation of high-voltage equipment could reduce dependence on imports and improve supply-chain control.

    However, the outlook is not without risks. Delays in large project awards and execution could affect revenue timing, while increases in commodity prices may put pressure on margins, particularly where contracts do not fully protect manufacturers against higher input costs. Uncertainty around export orders and global data centre investment could also influence near-term performance.

    The report said the scale and timing of transmission projects, progress in domestic manufacturing and continued investment in data centres would be important factors determining how effectively the sector capitalises on the emerging opportunities.

    • Published On Oct 12, 2026 at 12:50 PM IST

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  • India's battery energy storage sector set for 91% growth to 302GWh by FY32E: Nuvama

    India's battery energy storage sector set for 91% growth to 302GWh by FY32E: Nuvama

    India’s battery energy storage sector is poised for rapid expansion as demand rises for grid balancing and round-the-clock renewable power.
    India’s battery energy storage sector is poised for rapid expansion as demand rises for grid balancing and round-the-clock renewable power.

    India’s Battery Energy Storage System (BESS) sector is projected to register a compound annual growth rate (CAGR) of 91 per cent between FY26 and FY32E, according to a recent report by Nuvama. The expansion reflects a critical infrastructure cycle designed to support renewable integration, grid balancing, and round-the-clock power requirements across the country.

    The report noted that cumulative capacity will surge from 6.3 GWh to 302GWh over the same period, with annual additions climbing from 5.7GWh in FY26 to 56 GWh by FY32E. The report noted that the Central Electricity Authority (CEA) estimates national BESS demand at 236 GWh by FY32 and 1,840 GWh by 2047.

    “We estimate annual BESS additions to rise from 5.7 GWh in FY26 to 56 GWh by FY32E, taking cumulative capacity from 6.3GWh to 302GWh (91 per cent CAGR) over FY2632E,” the report said.

    “With 89 per cent of current requirements met through imports, falling battery costs, alongside a likely ALMM-like framework, could accelerate adoption, localisation and domestic capacity growth. Although Li-ion occupies 98 per cent of the BESS market, sodium-ion technology and China+1 themes are an opportunity for India,” the report added.

    Manufacturing economics reveal distinct margins across end-markets, with commercial, industrial, and retail segments yielding spreads of $18 to 23 per kilowatt-hour, corresponding to EBITDA margins of 17 to 20 per cent. By contrast, the utility segment records spreads of $8 per kilowatt-hour and an EBITDA margin of 9 per cent.

    “Our analysis shows attractive cell-to-pack manufacturing economics with materially differentiated spreads across end-markets,” the report noted. “Even with low spreads of USD8/kWh (EBITDA margin 9 per cent) for the Utility segment, our calculation and channel checks indicate a one-to-two-year payback.”

    The report also highlighted that while returns for an integrated BESS facility yield a modest internal rate of return of 12 per cent, domestic production maintains a distinct cost advantage through capital expenditure of $80 million per gigawatt-hour, coupled with production-linked incentive support of ₹181 billion for 50 GWh and competitive labour expenses. Cell-to-pack configurations demonstrate an internal rate of return of 31 per cent.

    “We believe with policy support, localisation and scale, integrated BESS could open up export-led growth,” the report noted.

    Financially, BESS integration is estimated to contribute 17 to 60 per cent to company revenues by FY28. Premier presents an opportunity of ₹103 billion, representing 60 per cent of its projected FY28 revenue, while Vikram is positioned for a 54 per cent revenue uplift.

    “Despite early battery ambitions and potential BESS addition of 17-60 per cent to FY28E revenue, most listed solar/BESS players’ earnings are yet to capture meaningful BESS contribution,” the report stated.

    “At 17x FY27E EPS, solar/BESS trades at a 77 per cent discount to battery chemicals and a 64 per cent discount to battery IPP peers. As capacity ramps up, we believe BESS could emerge as a strong driver of earnings upgrade and valuation re-rating,” the report said.

    • Published On Oct 12, 2026 at 11:26 AM IST

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