Bernstein Sees India Power Demand Surge in H2 2026

Bernstein Forecasts Higher Power Demand

Bernstein projects a significant increase in India's power demand for the second half of 2026, exceeding previous forecasts due to anticipated climate changes. However, the brokerage does not expect this to translate into higher earnings for power companies.

Situational Overview

The revised outlook is linked to an earlier-than-expected shift from La Nina to El Nino, potentially leading to warmer conditions. For fiscal year 2027, Bernstein estimates India's power demand growth will reach 0.9 times the nation's real GDP growth.

Market Impact and Sector Outlook

Despite the demand surge, Bernstein cautions that wind and hydro power producers may face challenges. The firm maintains NTPC as its top pick in the sector and highlights Larsen & Toubro as a key beneficiary from thermal and nuclear expansion projects. In response, NTPC shares rose 3.4 percent and Larsen & Toubro gained 3.0 percent on Thursday.

Summary

Investors should monitor climate patterns and their impact on different energy sub-sectors. While overall demand is rising, profitability may be concentrated in specific companies like NTPC and construction firms such as Larsen & Toubro, rather than the entire industry.

FAQ

Q: Why is India's power demand expected to increase?
A: A forecasted early shift from La Nina to El Nino is expected to cause warmer weather, driving up power consumption.

Q: Which companies does Bernstein identify as potential beneficiaries?
A: Bernstein identifies NTPC as its preferred stock and expects Larsen & Toubro to gain from new construction orders for power projects.

Source: Investing.com