Power Stocks Rally 15%: Key Factors Behind The Surge

While the broader markets are falling, Power stocks are bucking the trend.

The early onset of summer and the ongoing LPG crisis amid the war in West Asia have increased the demand for electricity. There is a surge in the use of induction cooktops and other electric cookware, as people want to have an alternative ready. Power demand was relatively lower during winter at 245 GW. This is less than the projected demand of 270 GW.

With this surge in demand, our dependence on coal based thermal power and solar power might increase. India’s Coal Ministry has stated that the country’s Coal stock of 210 MT is adequate for 88 days.

Power Generation companies typically benefit through higher utilisation of their capacity when power demand grows. Power utilities are also relatively defensive businesses that might see steady earnings and cash flows amid the current situation

NTPC Green gained 15%, followed by JSW Energy, Adani Power, CESC, BHEL, KPI Green Energy and Torrent Power among others.

Let’s take a look at their CRISP Analysis:

NTPCGREEN₹100.60 +15.99%