Power Stocks to Buy: JM Financial Picks 5 Stocks with Up to 39% Upside Amid Rising Demand

Stocks to BUY: These 5 Power Stocks Could Surge Up to 39% as Summer Heat Drives Record Demand

As the mercury climbs across the Indian subcontinent in early 2026, the domestic power sector is heating up in tandem. The seasonal transition has triggered a predictable yet sharp surge in electricity consumption, placing power generation and distribution companies squarely in the spotlight for institutional and retail investors alike.

In a comprehensive sectoral analysis, prominent brokerage firm JM Financial has spotlighted the companies best positioned to capitalize on this peak-load environment. The report underscores a critical shift: the “winners” in this environment are no longer just those with the largest portfolios, but specifically those possessing merchant capacity and the operational flexibility to sell electricity at premium rates during high-demand windows.

The Strategic Shift: Why “Surplus Capacity” is King

The core thesis of JM Financial’s bullish outlook rests on the disparity between fixed-rate long-term Power Purchase Agreements (PPAs) and the volatile, high-margin spot market. While many utilities are locked into steady but lower-margin contracts, companies with unallocated capacity can divert power to the energy exchanges when prices spike.

As temperatures rise, the gap between supply and demand widens, particularly when solar generation drops off in the evenings. This creates a “seller’s market” where companies capable of ramping up production during peak hours can command significant price premiums.

JM Financial’s Top 5 Power Picks: Detailed Breakdown

The brokerage has identified five key players that offer a mix of stability, renewable transition potential, and raw generation power.

1. Adani Power: The Top Contender

JM Financial has named Adani Power as its “Top Pick” for the season. As one of India’s largest private thermal power producers, Adani Power is uniquely positioned to benefit from the current reliance on coal-based generation. Its strategic geographical spread and ability to manage fuel logistics efficiently make it a primary beneficiary of the surging merchant power prices.

2. Adani Green Energy: The High-Growth Opportunity

• Rating: BUY

• Target Price: ₹1,204

• Potential Upside: ~39%

  While the current crunch highlights the need for base-load thermal power, the long-term thematic play remains green. Adani Green Energy is the most aggressive pick in the list, with a projected upside of nearly 40%. The brokerage views the current market correction as an entry point into a company scaling its capacity toward a massive 45 GW goal by 2030.

3. JSW Energy: The Efficiency Play

• Rating: BUY

• Target Price: ₹614

• Potential Upside: ~20%

  JSW Energy has been diversifying its portfolio into wind and hydro while maintaining a robust thermal core. Its focus on improving operational margins and its presence in the high-demand industrial belts of India provide a solid 20% growth trajectory.

4. NTPC: The Defensive Powerhouse

• Rating: BUY

• Target Price: ₹420

• Potential Upside: ~10%

  As a state-owned behemoth, NTPC offers a safer bet for conservative investors. With coal plants currently running at nearly 95% capacity, NTPC’s massive infrastructure is the literal backbone of India’s grid. While its upside is more modest at 10%, its dividend yield and stability make it an essential portfolio component.

5. Tata Power: Integrated Excellence

• Rating: BUY

• Target Price: ₹429

• Potential Upside: ~6%

  Tata Power’s strength lies in its integrated model—from generation to transmission and distribution (T&D), all the way to EV charging. While the upside is calculated at a conservative 6% from current levels, its dominance in the rooftop solar and smart metering space provides long-term value beyond the summer surge.

The Contrarian View: Conversely, JM Financial has issued a ‘Reduce’ rating for Coal India, with a target price of ₹420 (a potential 10% decline). Despite high demand for coal, the brokerage suggests that the market has already priced in the volume growth, and potential increases in operational costs or regulatory shifts could weigh on the stock’s performance.

Understanding the “Evening Crunch”: The Non-Solar Gap

The most compelling data point in the JM Financial report is the divergence between daytime and nighttime demand. On March 10, 2026, a snapshot of the national grid revealed a fascinating trend:

This data confirms that while solar power is effectively managing daytime loads, the “real” pressure begins at sunset. As millions of air conditioners are switched on simultaneously during the evening, the reliance on thermal, hydro, and gas becomes absolute. This is where the price discovery happens.

Plants Pushed to the Brink

To satisfy this 7:00 PM surge, the national energy mix is being pushed to its operational limits. The current capacity utilization (Plant Load Factor) paints a picture of a stressed system:

• Coal-based Plants: 95% (Near full capacity)

• Nuclear Plants: 87%

• Hydro Plants: 67%

• Gas Plants: 28%

The fact that coal plants are running at 95% capacity underscores the “emergency” nature of the current supply chain. It also explains why prices on the Indian Energy Exchange (IEX) have seen a 21.7% jump in a single day, with average units rising by ₹1 from a baseline of ₹4.60.

The Evolution of Trading: RTM vs. DAM

Finally, the report highlights a sophisticated shift in how power is bought and sold. Historically, Distribution Companies (Discoms) relied on the Day-Ahead Market (DAM)—buying power 24 hours in advance based on forecasts.

However, with the inherent volatility of renewable energy (which can fluctuate based on cloud cover or wind speeds), Discoms are moving toward the Real-Time Market (RTM). The RTM allows for electricity to be purchased just an hour before delivery. For generators with surplus capacity, the RTM is a goldmine, as it often sees the highest price spikes when a Discom is desperate to avoid a blackout.

Final Thoughts

The “Power Summer” of 2026 is proving to be a watershed moment for the sector. While the heat presents a challenge for the grid, it offers a lucrative window for investors. By focusing on players like Adani Power and Adani Green, who offer either massive merchant leverage or high-growth renewable trajectories, investors can potentially “energize” their portfolios during this period of peak demand.