Antique Stock Broking has released its latest analysis of India's power sector, highlighting NTPC Ltd, Adani Power Ltd, and ACME Solar Holdings as its preferred investment choices. The brokerage emphasizes that despite significant installed capacity, the sector faces challenges with firm deliverability, largely due to grid access and transmission bottlenecks.
NTPC Leads as Preferred Pick
NTPC Ltd is Antique's top recommendation with a 'Buy' rating and a target price of Rs 423. The brokerage points to NTPC's prevailing valuations and limited downside risk. It notes that the company's recent stock slide is sentiment-driven, linked to management transition concerns and sector-wide fund rotations, rather than fundamental issues, as its regulated model ensures earnings based on availability.
Long-Term Growth Bets: Adani Power and ACME Solar
For long-term growth prospects, Antique favors Adani Power Ltd, citing its substantial 2.3 times expansion in thermal capacity. The brokerage has set a target price of Rs 242 for Adani Power.
ACME Solar Holdings also features on Antique's list, with a target price of Rs 363. The firm highlights that merchant Battery Energy Storage System (BESS) arbitrage has significantly boosted ACME Solar's earnings, even amidst delays in project commissioning.
Grid Access: The New Scarce Asset
Antique's report underscores a critical shift in the Indian power sector: grid access, rather than megawatts, has become the scarce asset. India's installed capacity has surpassed 537 GW, with near-zero deficits projected for FY26. However, 40 GW of awarded renewable projects remain unsigned, curtailment is increasing in surplus regions, and evening peak shortages persist.
The brokerage points to a 128 GW connectivity logjam and significant transmission delays, with 57 out of 86 under-construction Inter-State Transmission System (ISTS) projects running approximately 10 months behind schedule. These delays are particularly concentrated in renewable corridors like Rajasthan and Gujarat.
Developer Responses to Bottlenecks
Transmission bottlenecks accounted for roughly two-thirds of the 300 GWh renewable curtailment observed in the March quarter. In response, developers are rationally deferring commissioning, staggering capital expenditure, and redirecting bids towards firm power structures that align with available evacuation infrastructure.
The market is now decisively shifting towards deliverable, evening-capable power, with Firm & Dispatchable Renewable Energy (FDRE), Round-The-Clock (RTC), and solar-plus-storage projects forming a major share of active tenders. The substantial Rs 7-8/kWh day-versus-evening merchant spread explicitly prices this scarcity of firm access, allowing merchant BESS operators to capture arbitrage and offset earnings pressure from delayed projects.