New Delhi [India], October 13 (ANI): India's power sector is expected to post up to 11 per cent year-on-year (YoY) profit growth in Q2FY27, driven by strong electricity demand, higher plant load factors and potential incentives for thermal power producers, according to Nuvama Institutional Equities.

Nuvama noted in its report, India's power demand rose nearly 12 per cent YoY to 163 billion units (BU) in September 2026 and 11.7 per cent to 503 BU in Q2FY27. This was largely due to high humidity and lower average rainfall. 

On the other hand, "peak power demand surged ~17.5% YoY to 269GW in Sep-26, led by non-solar hour demand."

Meanwhile, India's thermal power accounted for nearly 69 per cent of total generation in Q2FY27, with plant load factors (PLFs) rising to 68.3 per cent from 61.9 per cent in Q2FY26.

Apart from this, tighter power supply pushed electricity prices higher on the Indian Energy Exchange (IEX), with solar-hour prices remaining elevated. Additionally, non-solar-hour prices also increased in September on YoY basis.

"Tighter supply pushed IEX prices higher, with solar-hour prices remaining elevated at INR5.6/unit and non-solar prices surging to INR9.5/unit in Sep-26 from Rs 3.2/unit in Sep-25," it said.

Nuvama further noted, electricity trading volumes on IEX rose 10.4 per cent YoY in September 2026 and 12.7 per cent in Q2FY27, with solar-hour prices averaging around Rs 3.8 per kWh during the quarter.

However, total trading volumes, including Renewable Energy Certificates (RECs), grew nearly 9 per cent year-on-year in September, while quarterly growth remained subdued at around 4 per cent.

At the same time, "Coal stock at NTPC's plants was down to about seven days in Sep-26 with low inventory of ~21MT (-54% YoY)," which further indicated a "tight" coal supply situation in the country.

"Total RE additions stood at ~16.4GW YTD (till Sep-26) with solar additions contributing ~14.3GW in YTDFY27," it said. 

Overall, as per the brokerage house, "IEX is expected to post moderate growth with overall volume rising merely 4% in Q2FY27." 

Meanwhile, major thermal power producers are expected to report 8-9 per cent year-on-year profit growth, supported by higher plant load factors (PLFs) and potential incentives. (ANI)