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Largely Muted Q2FY26: Weak Power Demand on Account of Extended Monsoon

Financial Performance

* NTPC’s gross power generation during Q2FY26 stood at 83.2 BU, down 6%/9% YoY/QoQ, mainly due to an extended monsoon, which led to lower power generation. Consequently, the company’s net sales stood flat YoY but down 5% QoQ to Rs 44,786 Cr, missing our and consensus estimates by 1% and 3%, respectively. EBITDA stood at Rs 12,816 Cr, up 10%/2% YoY/QoQ, in line with our estimate and consensus estimates by 1% respectively. EBITDA margins were 29%, up 254 bps/189 bps YoY/QoQ. PAT stood at Rs 5,225 Cr, down 3%/14% YoY/QoQ, beating our and consensus estimates by 23% and 2%. PAT adjusted for regulatory deferral movement stood at Rs 3,548 Cr.

* NLC India’s gross generation in Q2FY26 stood at 6,767 MW, up 2% YoY and QoQ. As per CEA data, the company’s Thermal Power Generation stood at 6,179 MU in Q2FY26, up 2% YoY and QoQ. Notably, strong improvement was seen in the PLF of TPS-II expansion after completion of modifications (PLF in Q2FY26 stood at 43% vs 20% in Q1FY26 and 26% in Q2FY25). Consolidated net sales stood at Rs 4,178 Cr, up 14%/9% YoY/QoQ, beating our estimates by 8% and consensus estimates by 4%. EBITDA stood at Rs 1,400 Cr, up 30%/50% YoY/QoQ, 18% beat on our estimates, and 8% beat on consensus estimates. EBITDA margins were at 33.5%, up 407bps/907bps YoY/QoQ. PAT after considering the regulatory deferral moment was down 26%/14% YoY/QoQ to Rs 725 Cr, largely due to lower other income. The regulatory deferral changes were a positive Rs 190 Cr. After adjusting for regulatory movements, the profit stood at Rs 534 Cr.

* JSW’s Power Generation stood at 14,939 MU, up 52%/11% YoY/QoQ, despite an extended monsoon. This was driven by increased capacity and improved Hydro Power Generation due to seasonally high PLFs. Net sales grew 60%/1% YoY/QoQ to Rs 5,177 Cr, missing our estimate and consensus by 8% and 4%, respectively. EBITDA stood at Rs 2,996 Cr, up 78%/7% YoY/QoQ, 4% beat on our estimates (due to better than expected margins) and in line with consensus estimates. EBITDA margins were 57.9%, up 584 bps/366 bps YoY/QoQ. PAT was down 6%/1% YoY/QoQ to Rs 824 Cr, a 2% beat on our estimates and 3% miss on consensus estimates.

* Inox Wind’s Q2 EBITDA stood in line with consensus estimates. Revenue stood at Rs 1,119 Cr, up 53%/35% YoY/QoQ, missing consensus by 11%. The company's EBITDA stood at Rs 228 Cr, up 32%/24% YoY/QoQ, in line with consensus. EBITDA margin stood at 20%, down 327 bps/188 bps YoY/QoQ but ahead of the guidance range of 18-19%. PAT stood at Rs 121 Cr, up 34%/24% YoY/QoQ, largely in line with the consensus.

* Skipper Limited’s Skipper reported a largely in-line set of numbers. Consolidated net sales stood at Rs 1,262 Cr, up 14%/1% YoY/QoQ, led by consistent execution and strong orderbook, a slight 3% miss on our estimates. EBITDA stood at Rs 131 Cr, up 16%/3% YoY/QoQ, a marginal 1% beat on our estimates. The EBITDA margins stood at 10.4%, up 23bps/22bps YoY/QoQ. PAT stood at Rs 37 Cr, up 12% YoY but down 18% QoQ, a 21% miss on our estimates. However, the PAT is affected by a one-time exceptional item like the settlement of disputed tax claims amounting to Rs 11 Cr.

* Genus standalone net sales grew by 136%/22% YoY/QoQ to Rs 1,149 Cr, 15% beat on our estimate and 45% beat on consensus estimate, led by consistent execution and strong orderbook. EBITDA stood at Rs 244 Cr, up 200%/23% YoY/QoQ, 23% beat on our estimate and 44% beat on consensus estimates. The EBITDA margins stood at 21.3%, up 496 bps/11 bps YoY/QoQ. PAT stood at Rs 148 Cr, up 154%/15% YoY/QoQ, 14% beat on our estimates and 40% beat on consensus estimates. Genus is in the execution stage of its strong order book of Rs 28,758. Focus will be on market share as Genus aims to grab ~25% market share, in line with its past track record.

Demand and Capacity

* Cumulative all-India electricity demand over Jul’25-Sep'25 stood at 449 BU, up 3.4%/0.8% YoY/QoQ. The peak demand was 230 GW for Q2FY26 in Aug’25 (vs. 231 GW during Q2FY25 in Sep’24 and 243 GW during Q1FY26 in Jun’25), a 0.4%/5.3% YoY/QoQ decline. The weakness in electricity demand is led by an extended monsoon. The IEX DAM prices in Q2FY26 stood at Rs 3.92/KWh, declining by 12%/11% YoY/QoQ, due to strong exchange volumes, primarily driven by robust RE generation.

* The Central Electricity Authority (CEA) forecasts a peak demand requirement of 366 GW by FY32, necessitating capacity enhancements across both thermal and renewable energy sources (RES). India aims to increase its installed capacity to 610 GW by FY27 and 900 GW by FY32. The installed capacity was ~501 GW as of Sep’25.

Thermal Power

* The Thermal capacity (including gas and diesel) in the country was 245 GW as of Sep’25.

* With rising peak load demand, thermal capacity will play a crucial role in meeting the base load demand. The government plans to add 80 GW of thermal capacity by 2032 to meet this growing power demand.

Renewable Energy

* The RE capacity (excluding large Hydro) in the country increased by 18 GW in Q2FY26 to 202 GW in Sep’25, led mainly by solar capacity additions of ~11GW and the balance by wind energy. In Jul’25-Sep’25, 7,250 MW, 5,750 MW, and 3,600 MW of RE tenders were issued, respectively, under the project development category.

* The government is putting curtailments on solar power outputs during periods of lower demand to keep the power grid stable. Congestion in the grid during lowdemand periods is arising due to new RE plants coming into operation ahead of schedule, while transmission lines have been delayed, leading to grid instability.

Wind Energy

* The CEA forecasts India’s total Wind Energy Capacity to increase to 73 GW by FY27 and 122 GW by FY32. As of Sep’25, India’s wind capacity stood at 53.1 GW. The CEA targets require an annual wind capacity addition of 10 GW per annum, which is aligned with the MNRE targets of 10 GW of wind capacity tenders up to FY28.

* ~1,449 MW of wind capacity was added in India in Q2FY26. During Apr’25-Oct’25, 8.3 GW of renewable capacity was awarded, of which ~3 GW comprised wind / FDRE related tenders (800 MW of Wind and 2,170 MW of FDRE).

Transmission

* In H1FY26, India added transmission lines capacity of 2,411 ckm (364 ckm of ISTS and 2,047 ckm of InSTS), down 27% YoY and against a target of 6,194 ckm. The FY26 official target for transmission line addition is revised downwards to 15,382 ckm from 24,400 ckm in Aug’25, citing right-of-way (RoW) challenges, which implies a 74% growth over the 8,830 ckm of actual addition in FY25. As of Sep’25, India’s total Transmission lines capacity stood at 4,96,785 ckm (2,15,006 ISTS and 2,81,779 InSTS), with 220 kV at 43%, 400 kV at 42%, 765 kV at 11.5%, 500 kV at 1.89% and 800kV at 1.94% and the balance 320 kV.

* In H1FY26, India added substation capacity of 44,645 MVA (27,820 MVA of ISTS and 16,825 MVA of InSTS), up 74% YoY against the target of 68,183 MVA. As of Sep’25, India’s total substation capacity stood at 13,82,158 MVA (5,83,705 MVA ISTS and 7,98,453 MVA InSTS).

* The government is gradually phasing out the ISTS waivers, which could have some impact on the Interstate transmission demand. However, it should not have a material impact, as the transmission projects are as per CEA RE additions targets, and further, even with the charges waiver being phased out, solar continues to be a cheap source of energy.

Smart Meters

* The Revamped Distribution Sector Scheme (RDSS) has a target of installing 25 Cr smart meters across India. Out of the 25 Cr smart meters, only 14.5 Cr are awarded while ~4.5 Cr are installed (as on 31st October, 2025).

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