Summer is kicking in, air-conditioners are set to work overtime, and the heat from the US-Iran war is beginning to spill into India’s power market too. As temperatures rise and geopolitical tensions keep global energy supplies on edge, power stocks are finding themselves back in the spotlight, with Axis Direct betting that strong demand, weather risks and transmission expansion could keep the sector charged up.
“India’s electricity sector continues to demonstrate underlying structural demand strength. Peak during the Apr’25 to Feb’26 period (11 months) reached 245 GW in Jan’26. While this compares with a peak of 250 GW in May’24 during the Apr’24 to Feb’25 period, the apparent moderation is largely a seasonal base effect,” said the brokerage.
It further pointed out that the case for power stocks is being shaped not just by demand, but also by weather and infrastructure. It noted that global climate models were pointing to a possible transition from La Niña to El Niño conditions as early as May 2026, which could intensify through FY27.
According to Axis Direct, hotter summers could raise cooling demand, weaker monsoon conditions could hurt hydro generation, and the result could be stronger dispatch for thermal power producers and coal suppliers. At the same time, transmission additions have remained healthy, with 1,895 ckm and 12,545 MVA of capacity added in February 2026 across ISTS and InSTS networks.
It further highlighted that, “In a significant policy signal, Minister of State for Power stated that peak power demand is projected at ~270 GW this summer, a robust ~8% step-up over the all-time high of ~250 GW recorded in May’24 and a significant leap from the the recent peak of 245 GW achieved in Jan’26.”
Based on that backdrop, Axis Direct has maintained Buy ratings on five power-linked names: JSW Energy, NLC India, Coal India and Skipper, while NTPC also stood out in the brokerage’s sector valuation table as a key thermal utility beneficiary of the improving demand trend.
Stocks to buy as power demand rises
JSW Energy | Target price: ₹630
Axis Direct has a Buy rating on JSW Energy with a target price of ₹630. The brokerage said the company’s mix of merchant capacity and long-term PPAs could help it benefit from tighter grid conditions and stronger power demand during peak summer. It added that if El Niño-led weather disruption pushes up spot power prices, JSW Energy could see better merchant realisations. The company’s diversified portfolio across thermal and renewable assets, according to the brokerage, also gives it both near-term earnings support and longer-term growth optionality.
| Target price: ₹300
Axis Direct has also maintained a Buy rating on NLC India with a target price of ₹300. The brokerage said the company stands out as a state-owned lignite-based thermal generator that could benefit from elevated dispatch requirements if power demand rises further. It also noted that NLC India’s captive fuel security reduces its exposure to external fuel cost volatility. That, along with its growing solar pipeline, makes it a relatively balanced play on both conventional power demand and the gradual clean-energy transition.
| Target price: ₹500
Axis Direct has a Buy recommendation on Coal India with a target price of ₹500. The brokerage said higher international coal prices could support e-auction premiums, while stronger domestic power demand may aid volume growth. It also noted that lower coal exports from Indonesia and elevated natural gas prices could improve the domestic demand environment for coal.
| Target price: ₹470
On the transmission side, Axis Direct has a Buy rating on Skipper with a target price of ₹470. The brokerage said the company is well placed to benefit from ongoing transmission infrastructure expansion. As of December 2025, Skipper’s order book stood at an all-time high of ₹9,009 crore, up 42% year-on-year, with 78% of the order book coming from domestic T&D orders. Axis Direct also highlighted a bid pipeline of more than ₹27,000 crore and said the current order book offers roughly two years of execution visibility.
For investors looking at the power space, Axis Direct’s thesis is built around a simple mix: steady demand, weather-led upside for thermal generation, and continued grid expansion. In that setting, the brokerage’s preferred ideas span generation, fuel supply and transmission, giving investors exposure to multiple parts of India’s power growth story.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.