The shares of the company rose slightly to today’s intraday high of Rs 217.25 apiece on NSE, before paring some gains. The sharp rally in April so far has added nearly Rs 1.3 lakh crore to the total market capitalisation of the company, taking it to Rs 4.19 lakh crore.
Temperatures soar
The mercury in several parts of Delhi, Rajasthan, Haryana and West Bengal on Wednesday breached the 42°C mark, as the India Meteorological Department (IMD) forecast heatwave conditions over major parts of northwest, central and eastern India in the next four to five days.According to the IMD, parts of Punjab, Haryana, Chandigarh and Delhi may see heatwave conditions on April 24-25, while similar conditions are likely to prevail over parts of other states as well. A heatwave is declared when the maximum temperature is 4.5°C to 6.4°C higher than normal, or the actual temperature breaches the 45°C mark.
El Nino impact?
JM Financial in a report said that average daily energy demand during the last week rose 10% year-on-year to 5,124 MU. In an earlier report, the domestic brokerage had highlighted that after a rare western disturbance led to unreasonably cold conditions earlier this year, the sky is clearing up and temperatures are rising. Additionally, 2026 is expected to be an El Nino year, which is marked by above-normal temperatures.
JM Financial explained how power demand peaked during previous El Nino years. It highlighted that El Nino in 2015 led to extended hot and humid weather up to October 2015. Peak demand grew 4-5% during September-November versus 1% in FY16 during that period. During April-June 2019, another El Nino year, the average temperature was 2.8°C higher on 64 out of 91 days. Peak demand grew 7-9% during April-June 2019, it said.Later in 2023, El Nino-driven dry conditions led to a five-year low in monsoon rainfall (94% of LPA), with extreme hot and humid conditions during June-August 2023. “All in all, we anticipate a shortfall in hydro generation (negative for NHPC, SJVN), spike in coal-fired generation (positive for NTPC, Adani Power), extension of Section 11 (Tata Mundra) and high merchant prices (Adani Green, Adani Power),” the domestic brokerage concluded.
“India’s peak power demand has already climbed to nearly 239 GW on April 18, above last year’s April level, and the government expects peak demand to reach 271 GW this summer. The Ministry of Power has also said that despite Middle East-related fuel disruptions, coal-based generation, renewables and storage are being leaned on to bridge the gap,” said Harshal Dasani, Business Head at INVasset PMS. For investors seeking the best tactical heatwave trade, Adani Power is the buy now, Dasani said.
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