The profit margins of India’s power sector may register an increase of up to 11 percent, driven by robust electricity consumption and a surge in generation capacity from thermal sources, reports ANI quoting Nuvama Institutional Equities.
In September 2026, the Indian power sector reported a demand growth of around 12 percent YoY at 163 Billion Units (BU). The overall power sector recorded an elevation in demand by 11.7 percent to reach 503 BU during Q2FY27. This came on account of elevated humidity and reduced precipitation.
Additionally, thermal power output contributed to around 69% of the total electricity generated during Q2FY27. Furthermore, plant load factors witnessed a significant jump to 68.3% against 61.9% in Q2FY26.
Furthermore, due to tightness in power availability, there was an increase in the cost of electricity at Indian Energy Exchange (IEX). The prices of solar hours have remained high. Moreover, the prices for non-solar hours also rose year-over-year in September.
IEX is forecast to witness decent growth, with overall volumes increasing only 4 percent in Q2 FY27. However, the key thermal power generators may deliver an earnings surge of 8-9 percent year-over-year. This would be driven by higher PLFs and possible incentives.
