1 hr ago
Jefferies Sees Power Stocks Rising Despite RBI Rate Hike
India’s central bank raised interest rates by a small amount.
Higher rates can make borrowing more expensive for power companies.
Jefferies says some companies may be protected because they have fixed-rate loans or can pass some costs on.
It named Adani Energy Solutions, JSW Energy and NTPC as its top power-stock picks.
Its price targets suggest different possible gains, but those are the brokerage’s estimates, not guaranteed results.
Jefferies says Adani Green Energy may be more exposed to higher rates because it has substantial debt.
It also expects electricity demand to remain important and says power shortages could return in the coming months.
The report sees recent share-price falls as opportunities in particular stocks.
Investors should not treat the report as a guarantee or personal investment advice.
Jefferies’ India utilities outlook, published October 7, 2026, followed the RBI’s 25-basis-point rate hike to 5.5%.
The brokerage’s top picks are Adani Energy Solutions, JSW Energy and NTPC, with stated potential upsides of 53%, 45% and 32%.
Jefferies also rates Adani Power, Power Grid, Adani Green Energy and Torrent Power Buy; it assigns Underperform ratings to Tata Power and Indian Energy Exchange.
It says regulated returns, fixed-rate loans and interest-cost pass-throughs may cushion some companies, while Adani Green has greater rate sensitivity due to high leverage.
Jefferies cites 10% year-on-year power-demand growth so far in 2026 and says shortages could return in four to five months; it views recent stock declines as stock-specific opportunities.
- Who
- Jefferies, the Reserve Bank of India, and the power companies covered in Jefferies’ report.
- What
- Jefferies assessed how higher interest rates could affect Indian power companies and named preferred stocks with target prices.
- Where
- India.
- When
- The outlook was published on October 7, 2026, after the RBI’s 25-basis-point rate hike.
- Why
- The rate hike and the possibility of further increases have raised questions about borrowing costs, earnings and potential electricity shortages.
Rate and supply risks
Jefferies’ constructive view
Higher borrowing costs
Rate and supply risks
Rate increases may weigh on earnings, with Adani Green Energy particularly exposed because of its high leverage; Jefferies estimates a 100-basis-point rise could reduce its earnings per share by more than 15%.
Jefferies’ constructive view
Jefferies says fixed-rate debt, regulated returns and mechanisms to pass through interest costs can limit the effect for companies including NTPC, Power Grid and Adani Energy Solutions.
Recent share-price declines
Rate and supply risks
Power stocks have corrected from peak levels over the preceding five to six months, and the report notes that some companies face distinct risks.
Jefferies’ constructive view
Jefferies remains constructive on the sector and describes the declines as stock-specific buying opportunities, citing possible power shortages and higher merchant prices.
Key facts
- RBI rate hike
- 25 basis points, taking the rate to 5.5%
- Jefferies outlook date
- October 7, 2026
- Top picks
- Adani Energy Solutions, JSW Energy and NTPC
- Top-pick target-price upside
- 53% for Adani Energy Solutions, 45% for JSW Energy and 32% for NTPC
- Fixed-rate loans
- NTPC and Power Grid have 36–57% of loans at fixed rates; Adani Energy Solutions has more than 65%
- Adani Green rate sensitivity
- Jefferies expects a 100-basis-point rate rise could affect earnings per share by more than 15%
- Power demand
- Up 10% year-on-year so far in 2026
- Potential shortages
- Jefferies says shortages could reappear in four to five months
Quotes
Jefferies
Investment bank whose report assesses India’s power sector.
“We remain constructive on the power sector overall and believe the recent correction in stocks from peak levels in the last 5-6 months is a stock-specific buying opportunity.”
financialexpress.com
“Power companies have some protection against hikes between regulated equity, fixed rate loans and lower rate hike pass through.”
financialexpress.com
Sources
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