Antique's Top Power Sector Picks Amid Surging Demand
Antique Stock Broking has identified Adani Power Ltd and ACME Solar Holdings Ltd as its primary recommendations within the power sector. The brokerage maintains a positive outlook on the industry, citing a robust start to FY27 driven by record-breaking power demand across India.
India's power demand has shown significant strength, with peak demand reaching an unprecedented 271 GW in May, marking a 17 percent year-over-year increase. This figure surpasses the previous record of 250 GW set in May 2024 and FY26's winter peak of 245 GW, signaling a clear recovery from the previous fiscal year's subdued growth.
Record Demand Fuels Optimism for Power Stocks
The strong demand figures underscore Antique's view that the power sector is entering a multi-year cycle of demand and capacity expansion. The brokerage anticipates a 6-7 percent demand growth for FY27, supported by tight summer balances and an emerging evening-peak deficit, which is expected to firm up merchant tariffs and accelerate the build-out of renewable energy plus storage solutions.
While Antique remains constructive, this optimistic assessment comes shortly after Kotak Institutional Equities cautioned that utility stock valuations have become rich due to anticipated rising demand, suggesting limited near-term earnings benefits.
Specific Stock Recommendations and Target Prices
Antique's analysis confirms a trend where private sector players are outperforming public sector undertakings (PSUs). The brokerage provided specific ratings and target prices for several key power stocks:
- Adani Power: BUY, target price Rs 242
- ACME Solar: BUY, target price Rs 363
- JSW Energy: BUY, target price Rs 640
- NTPC: BUY, target price Rs 423
- Power Grid: HOLD, target price Rs 317
- IEX: HOLD, target price Rs 141
The report also noted that the evening or non-solar-hour peak reached a new high of 246 GW, up 10 percent year-over-year, while solar-hour peak demand was met without deficit in May, despite a 1-4 GW shortfall on peak evening days. Energy demand and generation in May increased by 12 percent and 10 percent year-over-year, respectively. Coal stocks remained comfortable at 49 million tonnes, equivalent to 16 days of supply, with Day Ahead Market (DAM) tariffs reversing higher to Rs 4.9/kWh.
"Following a largely stable Q4 earnings season, we remain constructive on the sector and prefer Adani Power and ACME Solar," Antique stated.