Delhi’s temperature hit 38.2°C on Tuesday, marking the hottest day of the year so far. Despite a relatively mild start to the summer, largely due to frequent rainfall from western disturbances, the recent shift in weather patterns has accelerated a steady rise in temperatures. High temperatures were recorded in other parts of the country as well.
Why power demand cooled down recently
JM Financial, in its report, said that power demand had peaked in early March, but a sudden weather disturbance caused by a rare western disturbance beginning on March 20, with a 1,000 km cloud cover stretching from Afghanistan through Pakistan into India, brought widespread rain and unseasonably cold conditions.Power demand, which peaked on March 10, cooled off as a result of falling temperatures. However, the massive cloud band across North India is now moving away. Skymet does not forecast any instances of extreme heat in the plains of North India during April 2026 despite rising mercury, JM Financial said. However, it added that intense pre-monsoon heat is expected beginning mid-May.
How power demand spiked during previous El Niño years
“There is a global consensus on transition from La Niña to ENSO-neutral in April, with ENSO-neutral favoured through May–July 2026 (>60% chance). According to IMD’s long-term forecast on April 13, the 2026 southwest monsoon seasonal (June–September) rainfall is most likely to be below normal (95–90% of the Long Period Average (LPA)). It further suggests development of El Niño conditions during the southwest monsoon season,” it added.
El Niño years have been marked by spikes in power demand, the domestic brokerage noted. It explained that El Niño in 2015 led to extended hot and humid weather until October 2015. Peak demand grew 4–5% during September–November versus 1% in FY16 during that period. During the summer of April–June 2019, another El Niño year, the average temperature was 2.80°C higher on 64 out of 91 days. Peak demand grew at an unprecedented 7–9% during April–June 2019, it said.In 2023, El Niño-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. JM Financial noted that India recorded its highest-ever peak demand of 240 GW in August–September 2023, up 22%/20% year-on-year.
Which stocks will benefit
“All in all, we anticipate a shortfall in hydro generation (negative for NHPC, SJVN), a 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.
Tata Power and Adani Power shares gained more than 3% each, while NTPC shares rose over 1.5% on Wednesday morning. Power Grid shares, meanwhile, gained more than 2%.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)