Why could Tata Power, JSW Energy, NTPC, BHEL and other power stocks be next defensive bet? Anil Singhvi explains

Domestic equity markets are experiencing volatility amid rising geopolitical tensions stemming from the conflict between Iran and the United States. However, some sectors may continue to offer opportunities for investors despite the broader correction in equities.

Market expert Anil Singhvi said the power sector could see increased investor interest in the coming months, driven by rising electricity demand and higher power prices.

He said electricity prices in the day-ahead market have recently surged close to Rs 10 per unit during peak hours, reflecting strong demand conditions.

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“Power prices in the one-day-ahead market have moved close to Rs 10 per unit during peak hours. This level was last seen around 2023 when demand was extremely strong,” Singhvi said.

Electricity Prices Higher

He said demand for electricity is increasing sharply in the evening hours, particularly around 7 pm, when consumption peaks. According to him, the current market conditions suggest that demand may remain elevated for longer periods compared with previous years.

“In the past, peak prices were visible only for one or two hours in the evening. This time, higher prices are being seen for longer durations in the evening and night trading sessions, which indicates stronger demand,” Singhvi said.

Gas Shortage Shutting Down

He said one of the major reasons for the surge in power demand is the shutdown of several gas-based power plants due to limited gas supply.

“Gas-based power plants are not operating because the gas supply has reduced significantly. When gas plants stop producing electricity, the demand shifts to other sources of power generation,” Singhvi said.

He also noted that the tight global supply of oil and gas has increased the dependence on electricity in several areas.

He said households and businesses are increasingly using electric appliances such as induction cooktops and microwaves, which are adding to overall electricity consumption.

“The shortage of oil and gas means people are using more electricity in their daily consumption. This structural shift is gradually increasing power demand,” Singhvi said.

Longer Summer May Boost Electricity Consumption

Another factor supporting electricity demand is the outlook for a prolonged and intense summer season. Weather agencies have warned that heatwave conditions could persist across several regions in the coming months, which may lead to higher use of cooling appliances such as air conditioners and fans.

Singhvi said the extended summer season could significantly push electricity demand. “This year, the summer season is expected to be longer and hotter. Heatwave conditions have already started appearing in several regions. Higher temperatures typically lead to a sharp rise in electricity consumption,” he said.

He added that power demand was relatively weak last year, which also creates a favourable base effect for higher growth this year. “Demand growth could look stronger because the base was relatively low last year. With rising temperatures and higher consumption, electricity demand may increase further,” Singhvi said.

Power Sector May Act as a Defensive Play

Given these factors, he said the power sector could emerge as a relatively defensive segment in the current market environment.

“Many traditional defensive sectors, such as FMCG and IT, have also seen pressure in recent weeks. In such a scenario, power stocks could attract attention from investors,” Singhvi said.

He advised investors to consider exposure to the power sector either through mutual funds focused on the theme or through select stocks.

“There are mutual fund schemes that invest specifically in the power sector. Investors who want diversified exposure can consider such funds,” he said.

Stocks to Watch

For investors looking at individual stocks, Singhvi highlighted several companies from the power generation and equipment segments. Among private sector players, he mentioned companies such as Tata Power, JSW Energy, Adani Power and Adani Green Energy.

In the public sector space, he cited NTPC as a major power producer that investors could track. He also pointed to companies involved in power equipment and technology supply chains, which could benefit from rising investments in the sector.

“These include companies such as ABB India, Hitachi Energy India, Bharat Heavy Electricals Limited and Siemens India,” Singhvi said. He noted that some of these stocks have already shown resilience even during recent market volatility.

“Several power equipment companies have maintained strong performance despite broader market weakness. This indicates continued investor interest in the sector,” Singhvi said.

At the same time, he advised investors to remain cautious and adopt a wait-and-watch approach amid ongoing global uncertainties. He said markets are currently reacting to geopolitical developments and investors should closely track news flow before taking aggressive positions.

“Markets are still reacting to global developments. Investors should remain cautious and observe how the current recovery sustains before taking major investment decisions,” Singhvi said. He added that further detailed analysis on sector opportunities and market trends will emerge as more data becomes available in the coming days.