Archive · 8 Oct 2026
Elara Favors NTPC, NLC, CESC; Sees Solar Equipment Margin Pressure
Elara Capital reviewed India’s power sector during the second quarter of FY27.
Electricity generation went up, especially from coal and renewable sources.
Hydropower output went down during the weaker monsoon.
Demand for electricity stayed high, and more electricity was traded on the Indian Energy Exchange.
Elara expects some regulated power companies to have stable earnings.
It is positive on NTPC, NLC India and CESC, with different ratings for each.
The brokerage also expects higher material costs and competition to squeeze profits at several solar equipment makers.
It expects a seasonally weaker quarter for some renewable power generators, while ACME Solar may gain from storage and merchant operations.
Power generation rose 11.2% year over year to 536 billion units in Q2FY27, according to Elara Capital.
Coal generation increased 13% and renewable generation rose 33%, while hydro generation fell 20% amid a weaker monsoon.
Indian Energy Exchange traded electricity volume rose 12.7% to 39,685 million units, while day-ahead and real-time prices increased.
Elara expects regulated utilities including NTPC and NLC India to report stable earnings, and rates NTPC and CESC Buy and NLC Accumulate.
Elara expects commodity costs and competition to pressure renewable equipment makers’ margins, including Waaree Energies, Vikram Solar, Emmvee and Premier Energies.
- Who
- Elara Capital, an investment brokerage, assessed power and renewable energy companies.
- What
- It reported sector trends and shared earnings expectations, stock ratings and target prices.
- When
- The assessment covers the second quarter of FY27, including July, August and September.
- Where
- India.
- Why
- High electricity demand supported generation and trading activity, while monsoon conditions, commodity costs and competition shaped company outlooks.
Positive outlook
Risks and pressure
Power utilities and trading
Positive outlook
Elara expects regulated utilities to report stable earnings and IEX to benefit from continued volume momentum.
Risks and pressure
The article reports no direct opposing forecast for these businesses; it notes that power generation and peak demand varied across months.
Renewable energy companies
Positive outlook
ACME Solar may benefit from incremental battery-storage and merchant-operation revenue; Vikram Solar has a Buy rating from Elara.
Risks and pressure
Elara expects seasonally weaker conditions for renewable generators and margin pressure for several renewable equipment makers due to commodity costs and competition.
- Power generation
- 536 billion units in Q2FY27, up 11.2% year over year.
- Generation mix
- Coal: 343 billion units, up 13%; hydro: 59.7 billion units, down 20%; renewables: 101 billion units, up 33%.
- Peak demand
- 270 GW in July, 258 GW in August and 269 GW in September.
- IEX traded volume
- 39,685 million units in Q2FY27, up 12.7% year over year.
- NTPC rating
- Buy; target price Rs 466.
- NLC India rating
- Accumulate; target price Rs 387.
- CESC rating
- Buy; target price Rs 228.
- Solar equipment outlook
- Elara expects margin pressure at Waaree Energies, Vikram Solar, Emmvee Photovoltaic and Premier Energies amid higher commodity costs and competition.