A recent preview from JM Financial indicates a strong second quarter for several prominent Indian power and energy companies. The brokerage firm projects significant growth in generation and earnings before interest, taxes, depreciation, and amortization (Ebitda) for many players, driven by new capacities and improved operational efficiencies.
Key Players Set for Growth
JM Financial expects companies like Adani Power Ltd, NTPC Ltd, Tata Power Company Ltd, JSW Energy Ltd, and Torrent Power Ltd to report double-digit year-on-year (YoY) growth in generation. This surge is anticipated to be a primary driver for their Ebitda growth during the September quarter.
- Adani Power: Forecasted to benefit from newly added capacity and a better plant load factor (PLF), with generation expected to grow 21% YoY. Sales could rise 29% YoY to Rs 17,334 crore.
- NTPC: Expected to see the full financial impact of capacities commissioned in the previous quarter (Q4).
- Tata Power: Its Mundra operations are set to bolster overall growth. The company is projected to report an 81% spurt in profit, reaching Rs 1,305 crore, on increased sales.
- JSW Energy: Growth is likely to be supported by the turnaround of its recently acquired plants.
- Torrent Power: The Nabha TPP is expected to aid its performance, despite muted gas-based generation.
Renewable and Equipment Manufacturers
The report also highlights positive trends for equipment manufacturers and some renewable energy firms:
- BHEL & Suzlon Energy: Both are estimated to achieve double-digit growth with improved margins, primarily fueled by their healthy order books. Suzlon Energy Ltd is seen reporting a 3% YoY rise in net profit to Rs 578 crore on a 24% YoY increase in net sales to Rs 4,815 crore. BHEL's Q2 profit is projected to surge 36% YoY to Rs 509 crore on a 20% YoY jump in sales to Rs 9,015 crore.
- Waaree Energies: Expected to see improved margins due to an enhancing integration ratio (cell/module). JM Financial estimates module dispatches at 4.1 GW in Q2FY27. Adjusted net profit is seen at Rs 917 crore, up 9% YoY.
Other Sector Insights
Hydro and Thermal Generation
NHPC, driven by projects like Parbati and Subansiri, and SJVN, supported by the Buxar thermal plant, also experienced significant generation growth following the full impact of new capacities commissioned in recent quarters.
Transmission and Coal
Transmission utilities such as PowerGrid and Adani Energy Solutions Ltd (AESL) are anticipated to report sequentially flat performance. Conversely, Coal India is expected to deliver a strong performance after several quarters, aided by improved offtake and e-auction premiums.
Renewable Developers and Challenges
JM Financial does not foresee major capacity additions from Adani Green, ACME Solar, and Juniper Green. However, arbitrage opportunities from Battery Energy Storage System (BESS) capacities in the merchant market are expected to drive sequential performance for some. INOX Wind may continue to experience subdued performance, as previously indicated by its management. Vikram Solar, with an 'only module' portfolio, is expected to continue struggling.
“BHEL and Suzlon, with healthy order books, are estimated to report double-digit growth with improvement in margins,” stated JM Financial in its report, highlighting optimism for these key players.