Power Stocks Surge on Robust Growth Outlook

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Shares of state-owned utilities NTPC and Power Grid hit an all-time high, while JSW Energy was up 5 percent on September 20 on high-volume trade, buoyed by a robust growth outlook for the sector.

The surge was triggered by a Jefferies report recommending NTPC, Power Grid, and JSW Energy as its top picks. The brokerage firm said that India’s capex-driven GDP growth is expected to lead to a rise in power intensity and the annual thermal plant-load factor is expected to cross 80 percent by FY25. Jefferies expects the capex CAGR in the power sector to rise 9x at 20 percent in the period of FY23 to FY26 versus a mere 2.2 percent recorded in the period FY10 to FY20. Overall, the brokerage expects investments in power generation, transmission, and distribution to rise 2.2x to $280 billion between FY24 and FY30.

The robust growth outlook for the power sector is supported by a number of factors, including:

  • India’s growing economy and population are expected to drive demand for electricity.
  • The government’s focus on renewable energy and infrastructure development is also expected to boost the sector.
  • The power sector is expected to benefit from the government’s various initiatives to promote electric vehicles and smart grids.

Investors are optimistic about the prospects of the power sector and are betting on stocks like NTPC, Power Grid, and JSW Energy to benefit from the sector’s growth.


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