Power stocks witnessed strong buying interest on Monday, April 13, even as Indian stock markets came under sharp pressure, with investors betting on rising electricity demand ahead of the peak summer season and stable fuel availability in the country.
Shares across the power and energy space moved higher on the back of strong volumes. led the gains, rising 3.7%, followed by , which climbed 3.4%. advanced 3.1%, while gained 3%. moved up 2.7% and Torrent Power added 2%. Among other key names, rose 2%, JSW Energy gained 1.7%, SJVN was up 1.6%, while NTPC and Suzlon Energy advanced 1.3% each.
The rally in came even as broader markets witnessed a sharp sell-off. Benchmark indices Sensex and Nifty 50 plunged on Monday, tracking weak global cues after U.S.-Iran ceasefire talks collapsed and crude oil prices surged, raising fears that the Middle East conflict could persist longer than expected.
Talks held over the weekend in Islamabad failed to yield a breakthrough, putting the fragile two-week ceasefire at risk. The U.S. Central Command said it would begin enforcing a blockade on all maritime traffic entering and exiting Iranian ports from 10 a.m. ET (1400 GMT) on Monday.
Reflecting the risk-off sentiment, Sensex dropped 1,682 points or 2.1% to day’s low of 75,868.32, while Nifty declined 495 points or 2% to its intra-day low of 23,555.60.
Why are power stocks rising today?
The primary trigger behind the outperformance in power stocks is the expectation of a sharp rise in electricity demand as India heads into the peak summer season. Investors are positioning for higher consumption, particularly during evening hours when demand typically spikes.
Supporting this view, the government reassured markets that fuel availability remains adequate. Addressing an inter-ministerial briefing in New Delhi on developments in West Asia, Coal Ministry Joint Secretary Sanjeev Kumar Kassi said sufficient coal stock is available at both mines and power plants, adding that there has been no increase in coal prices despite geopolitical tensions.
Similarly, Sujata Sharma, Joint Secretary at the Ministry of Petroleum and Natural Gas, said that LPG, petrol and diesel supplies remain stable across the country, with normal distribution continuing. This assurance has eased concerns around fuel shortages that could disrupt power generation.
Data trends have also reinforced bullish sentiment in the sector. According to a JM Financial report last month, evening power demand reached 224.6 GW at 7:00 PM on March 10, marking a 7% year-on-year increase and the highest level ever recorded for March. During these non-solar hours, demand was supported by a mix of renewable energy, hydro, gas, nuclear and coal, operating at utilisation levels of 67%, 28%, 87% and 95%, respectively.
Further, data from the Ministry of Power released on March 16 showed that India’s total installed power generation capacity stands at 5,20,511 megawatt. Since FY2014-15, the government has been working to transition the country from a power-deficient to a power-sufficient nation, strengthening long-term sector fundamentals.
Beyond seasonal demand, structural factors are also supporting the rally. Rising energy consumption, partly driven by increased use of electric appliances such as induction cooktops amid an ongoing LPG-related disruption, is boosting electricity demand. Additionally, the broader West Asia crisis has disrupted global supplies of natural gas and crude oil, making domestic power generation relatively more attractive.
Together, these factors have helped power stocks outperform the broader market, even as global uncertainties continue to weigh on overall investor sentiment.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.