Key facts
- Macquarie initiated coverage on JSW Energy with an 'Outperform' rating and a Rs 720 target price.
- Macquarie initiated coverage on Adani Power and Adani Energy Solutions with 'Neutral' ratings.
- NTPC is Macquarie's top pick in India's power sector, with a raised target price of Rs 480.
- Macquarie raised target prices for Power Grid to Rs 400 and Adani Green to Rs 1,700.
- India's power sector is expected to grow installed capacity to 900 GW by FY32, requiring significant energy storage.
- Peak power demand hit a record 271 GW in May 2026, highlighting grid stress.
Macquarie has initiated coverage on several Indian power companies, identifying NTPC as its top pick and raising target prices for others amid a broad-based regulatory and operational reset in the sector. The brokerage initiated coverage on JSW Energy with an 'Outperform' rating and a Rs 720 target price, implying over 28% upside. Adani Power and Adani Energy Solutions were initiated with 'Neutral' ratings and target prices of Rs 230 and Rs 1,450, respectively.
NTPC received a raised target price of Rs 480, indicating a 36.5% upside, and was followed by JSW Energy, Power Grid, Adani Green, Adani Power, and Adani Energy Solutions in Macquarie's sector preferences. Power Grid's target price was increased to Rs 400, and Adani Green's to Rs 1,700.
Macquarie highlighted that India's power sector is evolving with coal anchoring baseload stability while renewables drive capacity growth. This transition is expected to expand installed capacity from 538 GW to 900 GW by FY32, necessitating 74 GW of energy storage to manage intermittency. Peak power demand reached a record 271 GW in May 2026, underscoring grid stress despite adequate base capacity. The Central Electricity Authority forecasts power demand to grow at a 6% CAGR through 2030, driven by industrial activity, cooling needs, and emerging segments like data centers and electric transport.
The brokerage anticipates a transmission-led capex cycle, requiring an estimated $51 billion investment through FY36 to connect renewable-rich states with consumption centers. A structural execution gap exists, with generation assets built in 12-18 months versus 36-48 months for transmission infrastructure. Grid curtailment remains a risk, as evidenced by 2,300 GWh lost in late 2025 when midday solar generation exceeded grid capacity.
Macquarie also noted improvements in India's distribution companies (discoms), supported by RDSS investments and smart metering, leading to better billing efficiency and reduced leakages. Regulatory tailwinds, including the Draft National Electricity Policy 2026 and the Electricity (Amendment) Bill 2026, signal a shift towards market-based systems and aim to improve discom finances.