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Below the Quote on Power Sector by Ankit Jain, Vice President, Co Group Head - Corporate Ratings, ICRA Ltd

"Data from GCIL indicates that India’s electricity demand registered a YoY growth of 9.0% during the first 22 days of June 2026 after a 11.2% YoY growth in May, reflecting a healthy recovery in the summer season despite continued weather disruptions. The YoY growth in first 2M FY2027 remained robust at 7.1%. In line with the current trend, the demand growth is expected to rebound in FY2027, supported by expectations of peak summer, Super El-Nino impact, a lower base and continued momentum in industrial and commercial activities. However, the growth will remain contingent upon any unforeseen weather-related events.

Healthy capacity addition trend continues in 2M FY2027 with addition of 9.6 GW, primarily driven by addition in the renewable energy segment as there was a healthy pipeline buildup due to healthy tendering activity over the past few years and expiry of the waiver on transmission charges each year in a staggered manner, starting June 30, 2025. Further, net capacity addition is likely to remain robust at around 50 GW in FY2027, led by a strong project pipeline in the RE segment.

Coal stock stood at around 15 days as on June 15, 2026, largely unchanged from levels seen in May 2026. Domestic coal production declined by 9.3% YoY in 2M FY2027 due to lower output from CIL; however, coal supplies to the power sector fell marginally by 1.1% amid mixed PLF trends in April and May. Sustained recovery in production and supply remains critical to maintain adequate buffer stocks. Further decline from the current level could lead to an inability to meet any significant surge in peak demand. While stocks remain below the normative level of 24 days, they are materially higher than that of September 2023.

Spot power tariffs on the Indian Energy Exchange (IEX) averaged at Rs. 4.6 per unit as on June 15, 2026, lower than Rs. 4.9 per unit in May 2026. However, the prices in June 2026 were much higher than Rs. 3.7 per unit recorded in June 2025. The spot tariffs continue to remain under pressure especially during the solar hours."

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