Macquarie Launches Coverage on Adani Power and NTPC, Boosts Target Prices for Three Other Power Stocks.
As India endures unprecedented heatwaves, the power sector is experiencing a significant transformation, benefiting both local shareholders and institutional investors alike. The latest analysis from Macquarie highlights a comprehensive regulatory and operational reset within the sector, laying the groundwork for enhanced performance across generation, transmission, and distribution. Specifically, Macquarie initiated coverage on several key players, offering an ‘Outperform’ rating for JSW Energy with a target price of Rs 720 per share, representing a potential upside of over 28%. Adani Power and Adani Energy Solutions received ‘Neutral’ ratings, with target prices of Rs 230 and Rs 1,450 per share, indicating modest upside and downside, respectively, reflecting a nuanced outlook on these entities amidst evolving market dynamics.
NTPC has been identified as the leading opportunity within the sector, with a revised target price of Rs 480 per share, showcasing an impressive upside potential of 36.5%. Power Grid also received an upward revision in its target to Rs 400 per share, signaling an anticipated increase of approximately 39%. Additionally, Adani Green’s target price has been adjusted to Rs 1,700, pointing to nearly 15% upside potential. The strategic bifurcation of India’s power landscape—balancing traditional coal resources with renewable energy capacity—presents a complex growth trajectory, poised to elevate the total installed capacity from 538 GW to an ambitious 900 GW by FY32.
Despite the promising outlook, several challenges loom on the horizon, particularly regarding the rapid expansion of energy storage systems necessary to accommodate the anticipated growth. The peak power demand saw a historic high of 271 GW in May 2026, underscoring grid stress and minimal supply headroom—issues exacerbated by the mismatch in the geography of renewable resources and consumption centers. Macquarie estimates that bridging this gap will require substantial capital investments, amounting to approximately US$51 billion by FY36, initiating a transmission-led capex cycle that poses its own set of logistical hurdles.
Furthermore, there are indicators that India’s distribution companies are turning a corner, thanks to structural reforms such as the Revamped Distribution Sector Scheme (RDSS) which is fostering improved billing capacities and reduced financial leakages. Legislative changes, including the Draft National Electricity Policy 2026, signal a shift toward market-oriented operations, potentially enhancing financial stability for discoms and paving the way for innovative energy trading mechanisms. These developments, if successfully implemented, could provide a foundation for long-term resilience within the sector, positioning it favorably for both growth and stability in the face of escalating demand pressures.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova team.)