Macquarie initiated coverage on JSW Energy with an ‘Outperform’ rating and a Rs. With a target price of 720 indicating an upside potential of more than 28% from the stock’s previous close.
The brokerage also initiated coverage on Adani Power and Adani Energy Solutions with ‘Neutral’ rating. He paid Adani Power a share of Rs. 230, implying an upside of around 4%, and valued Adani Energy Solutions at Rs. 1,450, indicating a downside of about 6%.
NTPC emerged as Macquarie’s top pick in the sector, followed by JSW Energy, Power Grid, Adani Green, Adani Power and Adani Energy Solutions. The brokerage raised its target price on NTPC to Rs. 480 per share, indicating a potential upside of 36.5% from the previous close price.
Macquarie also sees strong upside in Power Grid, raising its target price to Rs. 400 per share, indicating an upside potential of around 39%. He also raised his target price for Adani Green to Rs. 1,700 per share, representing an upside of about 15%.
India’s power sector is undergoing a dual-track evolution
According to Macquarie, India’s power sector is developing on two parallel tracks – coal continues to anchor baseload stability, while renewables increase capacity.
Live events
This transition is expected to support expansion of installed capacity from 538 GW currently to 900 GW by FY32. However, achieving this scale would require rapid deployment of 74 gigawatts of energy storage to manage outages and meet evening peak demand.
“Peak power demand touched a record 271 GW in May 2026, leaving minimal supply headroom and highlighting grid stress despite adequate base capacity,” Macquarie noted.
The Central Electricity Authority (CEA) expects power demand to grow at a 6% CAGR through 2030, supported by strong industrial activity, which accounts for roughly half of demand, structurally rising cooling requirements contributing to over 20% growth, and emerging high-load segments such as data centers and electrified transport.
Macquarie believes this will increase pressure on both generation and transmission infrastructure.
The brokerage expects India to enter a transmission-led capex cycle with an estimated investment requirement of US$51 billion by FY36 to bridge the geographic mismatch between renewable-rich states and major consumption centers.
It also highlights the infrastructure implementation gap: generation assets can typically be built in 12-18 months, while transmission infrastructure often takes 36-48 months, requiring active corridor development.
Grid outages remain the main risk. Macquarie pointed to a loss of 2,300 GWh at the end of 2025, when midday solar generation exceeds the grid’s absorption capacity.
Indian discoms are on the road to recovery
Macquarie also noted that India’s distribution companies (discoms) are showing signs of recovery, supported by RDSS-led investments and smart metering initiatives.
Improved billing efficiency, lower leakages and reduction in overdue payments under the Late Payment Surcharge (LPS) mechanism indicate materially stronger financial health compared to previous years, it said.
Regulatory tailwinds are supportive, the brokerage added.
“The draft National Electricity Policy 2026 signals a fundamental shift towards market-based systems, shifting coal as a flexible, balanced resource rather than a rigid baseload source. Legislative amendments such as the Electricity (Amendment) Bill 2026 and the Digital India Energy Stake-Com to reform the Electricity (Amendment) Bill 2026 to discom. Trade,” said Macquarie.
(Disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. These do not represent the views of Economic Times)
(You can now subscribe to our ETMarkets WhatsApp channel)