Nuvama Institutional Equities has identified ACME Solar Holdings Ltd, NTPC Ltd, and Power Grid Corporation of India Ltd as its premier selections within India's burgeoning power sector. This assessment comes as the nation experienced a significant surge in electricity demand during August 2026.
India's Power Demand Surges Amid Warm Weather
India's power demand recorded a substantial 12.95% year-on-year increase in August 2026. This rise was primarily driven by higher average temperatures and a monsoon season that delivered less rainfall than anticipated. Nuvama reported that the average temperature minimally climbed to 27.91°C in August 2026, up from 26.81°C in the same month of the previous year.
During this period, peak electricity demand reached approximately 258 gigawatts (GW), marking a 12.4% increase from 229 GW in August 2025. Concurrently, the all-India thermal plant load factor (PLF) showed improvement, rising to 66.8% from 61.7% previously.
Nuvama's Market Observations and Picks
Nuvama's analysis highlighted a continued trend where electricity supply during solar hours consistently exceeded demand, leading to sustained low prices. Conversely, non-solar hours saw a noticeable decline in supply. The brokerage also noted that the Indian Energy Exchange (IEX) reported a 20.25% year-on-year growth in electricity volumes for August 2026, largely attributed to a significant 111% surge in day-ahead market (TAM) volumes.
Against this backdrop, the firm has issued specific ratings and 12-month target prices for its top picks:
- ACME Solar Holdings Ltd: Nuvama maintains a 'Buy' rating with a target price of Rs 448.
- NTPC Ltd: The brokerage also assigned a 'Buy' rating, setting a target price of Rs 445.
- Power Grid Corporation of India Ltd: Nuvama holds a 'Hold' rating for Power Grid, with a 12-month target price of Rs 283.
Recent Stock Performance
Following these developments, shares of Power Grid climbed 2.27% to close at Rs 272 on Thursday. NTPC also saw a rise, gaining 1.13% to settle at Rs 337. In contrast, ACME Solar experienced a slight decline, ending the trading day down 1.33% at Rs 396.95.