India’s power sector is expected to remain supercharged through FY27, as rising electricity demand, record peaking power consumption, and continued capacity additions fuel growth, a report by 360 One Capital said.Electricity consumption is expected to remain resilient as the pace of industrial and commercial activity increases, creating favorable conditions for power utilities, the brokerage said. Companies with fuel-safe thermal assets coupled with growing renewable energy portfolios are likely to be better positioned to achieve sustainable earnings growth.India consumed nearly 485 billion units of electricity during the April-June 2026 quarter, an increase of about 8 per cent over the previous year.
Peak energy demand rose to 270.82 gigawatts in May, and the report attributed the increase to severe heatwave conditions, the delayed onset of monsoons and increased cooling requirements. Short-term electricity trading also rebounded during the quarter. Trading volumes on the Indian Energy Exchange rose nearly 16% year-on-year in the first quarter of fiscal 2027, indicating increased reliance on exchange-based markets during periods of tight supply.
Even as renewable energy continues to expand rapidly, thermal energy is expected to remain a key component of India’s electricity mix. The report said the country’s energy strategy will continue to rely on both sources, with coal-fired plants providing reliable base load power.“Coal remains the backbone of India’s electricity system, contributing about 70% of total power generation and providing reliable base load power,” the report said, adding that this dependence is unlikely to change appreciably over the next decade given strong demand growth and the need for round-the-clock power.India’s installed power generation capacity has crossed 548 GW by June 30, 2026, with non-fossil fuel sources accounting for about 54 per cent of the total. During the quarter alone, the country added 16.8 GW of new capacity, including 13.2 GW from renewable sources, 2.9 GW from coal-based thermal projects, and 650 MW from hydropower.The power generation sector also recorded broad-based growth during the quarter. Total electricity generation increased by 8 percent year-on-year, while renewable energy generation expanded by 21 percent.
Thermal power generation increased by 7 percent during the same period.Looking ahead, 360 ONE Capital said the sector outlook for FY27 remains positive. Energy security priorities and the potential for an El Niño impact could support thermal energy demand, while capacity additions are expected to boost utility performance.The brokerage expects improved power generation and new capacity to support the profits of many utilities, although it warned that higher interest and depreciation costs could impact some companies focused on renewable energy in the near term. She added that coal stock levels and the pace of project implementation will remain key factors to monitor, while rising electricity demand, renewable expansion, thermal additions and storage development are expected to support long-term growth of the sector.