JSW Energy, NTPC Green, Tata Power, other power stocks lose steam, fall up to 3%

Shares of power companies including NTPC Green Energy and Tata Power fell as much as 3% on Monday, as investors booked profits after last week’s sharp rally on expectations of stronger demand amid rising temperatures.

Shares of NTPC Green fell 3% on Monday to Rs. was traded at 95.05. Shares of JSW Energy fell around 2%, while Tata Power fell more than 1% in the morning. Both these stocks have gained about 5% in a week.

An unusual rise in temperature has been observed as spring fades slowly to welcome the summer season. The World Meteorological Organization (WMO) said there was a widespread indication of above-average land surface temperatures during the March-May period due to varying climatic conditions.

The Meteorological Department has issued three heatwave warnings for Mumbai in the first 10 days of March. Along with other major cities, the temperature in Delhi also remained high. Rajkot in Gujarat recorded a temperature of 42 degrees Celsius on Tuesday last week, topping the charts so far this year.

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“Given the current geopolitical developments, we envisage a high probability of sustained high LNG prices and a severe summer scenario that increases coal-fired generation to meet evening demand,” JM Financial said.

“Due to deficiency in winter rainfall and snow cover there is a high possibility of shortfall in hydro generation during the coming summer. Shortage in LNG supply adds to the supply challenges, which affects gas-based generation (9GW capacity, currently online). Hence, we anticipate implementation of Article 11 or some other mechanism to continue high operationalization of existing ICBs along with the implementation of thermal power plants,” it added.

However, temperatures have recently dropped slightly, as the IMD warned of thunderstorms, rain and gusty winds in some parts of the country. Heavy rain is expected over parts of North-East and East India in the next few days.

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According to the IMD, defying forecasts, temperature conditions have been significantly above normal in some regions in the last 24 hours. Vidarbha’s Akola recorded the highest temperature of 41.6 degrees. Day temperatures ranged between 38°C and 41°C in parts of Rajasthan, Gujarat, Maharashtra and Madhya Pradesh.

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