Synopsis : Jefferies expects private companies to account for 63% of India's incremental power capacity additions between FY26 and FY30, driven largely by renewable energy. The brokerage prefers JSW Energy and Adani Energy Solutions, while Torrent Power offers the highest potential upside of around 43% among its Buy-rated power stocks.
Jefferies sees private players driving 63% of India’s power capacity additions by FY30
India’s power sector is entering a new phase of expansion. But this time, the growth story may not be led primarily by government-owned companies.
Private players are expected to take a much larger share of incremental power capacity additions over the next few years, particularly in renewable energy.
According to Jefferies, private companies could account for 63% of India’s incremental power capacity additions between FY26 and FY30.
The brokerage expects renewable energy to drive most of this expansion, creating a larger growth runway for companies such as JSW Energy, Adani Energy Solutions, Adani Green Energy and Torrent Power.
Among Jefferies’ preferred names, Torrent Power offers the highest potential upside of around 43%, while Adani Energy Solutions and Adani Power also feature prominently. JSW Energy remains one of the brokerage's top picks because of its aggressive capacity expansion plans.
Jefferies’ power stock picks and targets
Jefferies has a Buy rating on JSW Energy with a target price of Rs 720, implying potential upside of around 31%.
Adani Energy Solutions has a Buy rating and a target price of Rs 2,060, implying around 34% upside.
Jefferies has also maintained a Buy rating on Adani Power with a target price of Rs 270, indicating approximately 33% upside.
Adani Green Energy carries a Buy rating with a target price of Rs 1,695 and potential upside of around 29%.
NTPC has a Buy rating with a target price of Rs 425, implying approximately 25% upside.
Power Grid also has a Buy rating, with Jefferies assigning a target price of Rs 315 and seeing around 16% upside.
Torrent Power has the highest potential upside among the rated stocks, according to the report, with a Buy rating and a target price of Rs 1,780, implying around 43% upside.
Jefferies is currently Unrated on Tata Power, with a target price of Rs 335, while Indian Energy Exchange is also Unrated with a target price of Rs 108.
Private companies could take the lead in India's power expansion
According to Jefferies, private companies could account for around 63% of India's incremental power capacity additions between FY26 and FY30.
The brokerage expects electricity demand to grow at approximately 6% annually during this period. Private-sector power generation, however, could grow at a faster pace of around 9% annually.
This difference in growth rates is central to Jefferies' investment thesis.
The brokerage expects private-sector companies to deliver stronger earnings growth than their public-sector counterparts over the coming decade.
India's total installed power capacity could rise to around 724 GW by FY30, representing a significant increase from FY26 levels.
Of the estimated 191 GW of new capacity expected to be added during this period, renewable energy could account for around 76%.
Thermal power is expected to contribute approximately 18% of incremental capacity, while hydropower could account for the remaining 6%.
Renewable energy is changing the power equation
The biggest transformation is expected to come from renewable energy.
Jefferies estimates that private companies could account for around 72% of incremental renewable energy capacity additions.
The private sector is also expected to contribute around half of the new thermal capacity.
This highlights an important shift in India's power sector.
Government-owned companies will continue to play a major role because of their massive existing asset base. However, private companies are increasingly expected to drive the next phase of capacity expansion.
The PSU share of India's total installed power capacity is expected to decline only moderately, from around 48% in FY26 to approximately 45% by FY30.
So, this is not necessarily a story about PSUs disappearing from the sector.
Instead, it is about private companies growing faster than the overall market.
Jefferies expects more than 80% of incremental renewable generation to come from the private sector.
Adani Green Energy alone could account for around 17% of incremental renewable capacity, according to the brokerage's estimates.
Meanwhile, Adani Power could contribute around 34% of the incremental thermal capacity.
Private players could deliver faster earnings growth
Capacity additions are only one part of the investment story.
Jefferies also expects significantly stronger earnings growth from private-sector power companies compared with public-sector players.
The brokerage expects private companies in its coverage universe, excluding Tata Power, to deliver EBITDA CAGR of around 13% to 30% between FY26 and FY30.
This could translate into profit-after-tax growth ranging from approximately 10% to 46%.
In comparison, Jefferies expects NTPC and Power Grid to deliver profit growth of around 7% to 8%.
The difference is largely driven by the expected pace of expansion.
Private companies have greater exposure to rapidly growing areas such as renewable energy, transmission infrastructure and new power-generation projects.
As capacity increases, companies with strong execution capabilities could potentially see faster revenue and earnings growth.
JSW Energy emerges as a key pick
JSW Energy is one of Jefferies' preferred power-sector stocks.
The company's capacity is expected to increase significantly from around 13.5 GW currently to approximately 24.7 GW by FY30.
This aggressive expansion could become the key driver of earnings growth.
Jefferies expects JSW Energy to deliver around 17% EBITDA CAGR between FY26 and FY30, supported by improved execution and capacity additions.
The investment case therefore depends heavily on the company's ability to execute its expansion plans on time and efficiently.
If the company can successfully bring new projects online, its earnings profile could change significantly over the next few years.
Jefferies' target price of Rs 720 implies around 31% potential upside from the levels considered in its report.
Adani Energy Solutions is another top pick
Adani Energy Solutions is also among Jefferies' preferred names.
Unlike pure power generators, the company provides exposure to India's expanding transmission infrastructure.
As India adds large amounts of renewable capacity, transmission networks will become increasingly important.
Solar and wind projects are often located far from major consumption centres, making investment in transmission infrastructure essential.
Jefferies expects Adani Energy Solutions to deliver around 21% earnings CAGR through FY30.
The brokerage sees the company as being positioned for double-digit medium-term growth, supported by its existing and upcoming transmission projects.
With a target price of Rs 2,060, Jefferies sees potential upside of around 34%.
Torrent Power offers the highest upside
Among the stocks rated Buy by Jefferies, Torrent Power has the highest potential upside.
The brokerage has assigned a target price of Rs 1,780, implying around 43% upside.
Torrent Power provides exposure across generation, transmission and distribution, giving it a diversified position within India's expanding power ecosystem.
The higher potential return reflects Jefferies' positive view on the company's ability to benefit from the sector's growth opportunities.
However, as with other power-sector stocks, execution, regulatory developments and the pace of capacity additions will remain important factors.
Adani Green and Adani Power remain important plays
Adani Green Energy remains one of the major renewable energy plays within Jefferies' coverage.
The brokerage expects the company to account for around 17% of India's incremental renewable capacity additions through FY30.
Jefferies has assigned a Buy rating with a target price of Rs 1,695, implying approximately 29% upside.
Adani Power, meanwhile, provides exposure to the continued need for thermal power.
Despite India's aggressive renewable energy targets, thermal power is still expected to account for around 18% of incremental capacity additions through FY30.
Jefferies estimates that Adani Power could contribute around 34% of the incremental thermal capacity.
The brokerage has a Buy rating and a target price of Rs 270, implying around 33% upside.
What about NTPC and Power Grid?
Jefferies remains positive on both NTPC and Power Grid.
NTPC has a Buy rating with a target price of Rs 425, implying approximately 25% upside.
Power Grid has a Buy rating with a target price of Rs 315, implying around 16% upside.
However, Jefferies expects their earnings growth to remain lower than that of several private-sector peers.
The reason is not necessarily weaker businesses.
Both companies already operate at massive scale, which makes rapid percentage growth more difficult.
Their role in India's power transition will remain important, but the brokerage expects faster growth from private companies that are aggressively expanding their renewable, generation and infrastructure portfolios.
What investors need to watch
Jefferies' broader thesis is that India's power sector is becoming increasingly driven by private-sector investment.
The key factors to watch over the next few years include:
- The pace of India's electricity demand growth.
- Renewable energy capacity additions.
- Private-sector execution on new projects.
- Transmission infrastructure expansion.
- The continued role of thermal power in meeting electricity demand.
- Project financing and capital expenditure requirements.
- Regulatory and tariff developments.
The biggest opportunity may lie with companies that can successfully execute large expansion plans without significant delays or cost overruns.
Conclusion
India's power sector is entering a major expansion cycle, and Jefferies believes private companies will capture a growing share of the opportunity.
The brokerage expects private players to account for around 63% of incremental power capacity additions between FY26 and FY30, with renewable energy driving most of the growth.
Among its preferred stocks, JSW Energy and Adani Energy Solutions stand out as key growth plays.
Torrent Power offers the highest potential upside at around 43%, while Adani Energy Solutions, Adani Power, JSW Energy and Adani Green Energy also offer significant potential upside, according to Jefferies' targets.
The broader message from the brokerage is clear: India's power expansion is no longer just a PSU story.
As renewable energy, transmission infrastructure and new generation capacity expand, private players could become increasingly important drivers of the next phase of India's power growth.
Disclaimer : This article is based on research reports from one or more brokerage firms and is for informational and journalistic purposes only. The ratings, target prices, forecasts and views mentioned are those of the respective brokerage firms and do not represent independent investment advice or the official position of this publication. This article should not be construed as an offer, solicitation or recommendation to buy or sell any security. Investors should conduct their own independent due diligence and consult a SEBI-registered investment adviser before making any investment decisions.
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