Jefferies Sees Power Sector Recovery in 2026; JSW Energy, NTPC Among Top Picks

Jefferies expects power sector stocks to rebound in 2026 as electricity demand normalises after being hit by unseasonal rains last year, which weighed on consumption, particularly from consumer durables.

In its latest note, the global brokerage named JSW Energy and NTPC as its preferred picks, citing their investments in new capacity, ongoing project execution, and the stability of long-term power purchase agreements (PPAs).

Jefferies said medium-term power demand growth is likely to revert to a 5–6 per cent CAGR, supported by the expansion of data centres and rising electric vehicle adoption. It added that renewable energy PPAs and additions to thermal power capacity are expected to accelerate in 2026.

JSW Energy share price

JSW Energy shares rose 2.5 per cent to Rs 514.55 on January 2, extending gains for a third consecutive session. The stock has gained over 7 per cent in the past five days but is down more than 1 per cent over six months. On a one-year basis, it has declined over 20 per cent.

JSW Energy currently trades at a price-to-earnings ratio of around 39 and has a market capitalisation of Rs 89,477 crore.

NTPC share price

State-run NTPC climbed nearly 4 per cent to Rs 349.30, its highest level since October 29. The stock is up over 7 per cent in the past five days and more than 4.5 per cent over the last six months.

NTPC trades at a P/E of 14.43 and has a market capitalisation of Rs 3,38,317 crore.

JM Financial’s view

JM Financial has flagged that electricity demand has become increasingly sensitive to weather patterns. Power demand remained almost flat between April and November last year due to excessive rainfall, the brokerage noted.

It added that the APEC Climate Center sees an “enhanced probability” of above-normal temperatures in India during April–June 2026, while Skymet has indicated a more than 60 per cent probability of El Niño conditions, increasing the risk of a weaker 2026 monsoon.

JM Financial said it remains watchful of evolving ENSO forecasts, given their potential impact on power demand trends.