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Quick Pointers

* Power demand grew only ~2% YoY, while DAM prices declined ~14% YoY in Q4FY26

* Earnings growth modest and divergent

Power sector performance in Q4FY26 is expected to be mixed, with underlying demand showing limited traction. Peak demand grew by ~2% YoY to 245GW; energy consumption also rose by ~2% YoY to 425BU. Power prices continued to moderate, with DAM prices declining ~12% YoY to INR3.9/kWh, led by higher renewable generation and comfortable coal availability, keeping supply conditions benign. Operational performance remained mixed across players—NTPC reported ~4% YoY decline in generation with PLF moderating to 65% (-400 bps YoY), while Tata Power saw a sharp decline in generation due to disruptions at Mundra. CESC reported stable performance with ~3% YoY growth in generation. The coverage universe is expected to report modest PAT growth of ~2% YoY , with divergence across companies. CESC, NTPC, IEX and Power Grid saw PAT growth, while Adani Energy Solutions, Coal India and Tata Power could see a decline. We retain top picks: PGCIL, NTPC and CESC. Skymet’s latest forecast indicates a below-normal monsoon for FY27 in India, which could support higher power demand in the coming quarters, given that around 40– 45% of power consumption (agriculture & residential segments) is weather-sensitiv

Muted demand growth and soft power prices:

In Q4FY26, underlying power demand remained subdued, with peak demand rising ~2% YoY to 245GW, indicating softer industrial and commercial activity. Energy consumption (base demand) grew at a similar pace, up ~2% YoY to 425BU. Power market prices continued to soften, with DAM prices declining ~12% YoY to INR3.9/kWh, driven by higher renewable generation and comfortable coal availability, which kept supply conditions benign

Mixed operational performance:

As per CEA-monitored data for Q4FY26, NTPC reported ~4% YoY decline in generation, with PLF moderating to 65% (vs. 69% YoY), indicating softer plant utilization. In contrast, the renewable segment continued to see strong momentum—ACME Solar Holdings and NTPC Green Energy delivered robust capacity expansion, with monitored capacity rising ~116% and ~72% YoY, respectively, translating into strong generation growth. Tata Power reported a sharp decline of ~72% YoY in generation, led by disruptions at Mundra. Meanwhile, CESC maintained stable performance, with generation increasing ~3% YoY.

Financial performance:

We expect our coverage universe (ex. Coal India) to report a modest increase of ~2% YoY in PAT for Q4FY26, with performance diverging across companies. On the positive side, CESC is likely to deliver high single-digit PAT growth, supported by the Chandrapur plant PPA, while NTPC and Power Grid Corporation of India are expected to report steady PAT growth of 3–6% YoY. Despite ~6% YoY EBITDA growth for Adani Energy Solutions, higher interest costs are likely to weigh on PAT. Coal India reported ~2% decline in operational performance, implying muted earnings. Meanwhile, Tata Power’s profitability is expected to be impacted by the absence of generation from the Mundra plant.

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