Shares of NTPC Green and Adani Power surged in trade on Friday as temperatures continued to soar above normal levels at the onset of the summer season, pushing hopes for better, heightened power demand in India.Fresh heatwave warnings have been issued by the India Meteorological Department (IMD) for isolated pockets in Mumbai for Friday and Saturday. The city has already witnessed three days of heatwave conditions in March so far. Delhi is likely to see temperatures rise to 36°C on Friday, which is above the normal level, according to the India Meteorological Department (IMD).

Heatwave conditions persist across parts of the country, with the weather department forecasting continued heat in Gujarat and Madhya Pradesh. Rajkot in Gujarat recorded 42°C on Tuesday, topping charts this year so far.

This has led to higher power demand across key Indian markets. According to a recent report by JM Financial, evening power demand hit 224.6GW at 7 PM on Tuesday, the highest ever recorded for March.

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Due to the unavailability of solar power during that time, supply was mostly supported by wind, hydro, gas, nuclear and coal operating at utilisation of must-run, 67%, 28%, 87% and 95% respectively, the domestic brokerage added.

“From my perspective, power demand is going to surge all across this summer. We are expected to have a record summer and some companies will benefit out of it,” Aditya Shah, Founder of Hercules Advisors, told ET Now.“Given the current geopolitical developments, we envisage a higher probability of a scenario of persistently high LNG prices and intense summer leading to a spike in coal-fired generation to meet evening demand,” JM Financial said. “There is a high probability of a shortfall in hydro generation during the upcoming summer due to a deficit in winter rainfall and snow cover. Shortages in LNG supplies add to supply challenges, impacting gas-fired generation (9GW capacity, currently online). Hence, we expect implementation of Section 11 or some other mechanism to enable operationalisation of ICB along with continued higher utilisation (PLF) of existing thermal power plants,” it added.

Stocks likely to benefit

JM Financial analysed 16 stocks from its coverage, spanning utilities and equipment manufacturers. Accordingly, it has revised its top five utility picks for this summer with a pecking order of Adani Power >Tata Power >NTPC >Adani Green >Coal India >JSW Energy.

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NTPC Green shares rallied more than 7% to trade at Rs 104.73 apiece, the highest level seen by the stock since the end of October last year. Adani Power shares jumped more than 3% to the day’s high of Rs 153.90 on the NSE.

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