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Power Stocks Rally as Geopolitical Tensions Boost Energy Sector

Shares of power and utility companies surged in the Indian stock market as geopolitical tensions linked to the US–Iran conflict influenced investor sentiment. Despite broader volatility in equities, energy stocks witnessed strong buying interest, pushing the BSE Power Index to its highest closing level in nearly 14 months.

The index ended at 7,057.01 points, gaining around 3%, making it one of the best-performing sectoral indices alongside the BSE Utilities Index. Several individual power stocks also recorded notable gains during the trading session.

Among the top performers, Adani Power led the rally, climbing more than 9% intraday before closing about 7% higher. JSW Energy followed with strong gains, ending the session around 6% higher. Equipment manufacturer Bharat Heavy Electricals Limited and utility firm Torrent Power also posted gains of around 4–5%.

Other power companies witnessing strong upward movement included NTPC Green Energy, NLC India, KPI Green Energy, Orient Green Power, RattanIndia Power, and Tata Power.

Market analysts attribute the rally to expectations of a significant increase in electricity demand during the summer season, along with concerns over global energy supply disruptions. Rising liquefied natural gas (LNG) prices and the possibility of shortages in liquefied petroleum gas (LPG) have also contributed to investor optimism around power producers.

Another factor supporting the sector is the possibility that the Government of India could invoke provisions under the Electricity Act, 2003 to ensure the operation of imported coal-based power plants if supply shortages emerge.

Data from the Grid Controller of India shows that evening electricity demand reached a record level for March, touching 224.6 GW—about 7% higher than previous levels. Analysts believe that continued high LNG prices and intense summer heat could lead to greater dependence on coal-fired generation to meet electricity demand during non-solar hours.

During these evening periods, the utilisation of different power sources varied widely, with coal-based generation operating at about 95?pacity, nuclear at 87%, hydropower at 67%, and gas-based generation at around 28%. With potential deficits in gas and hydro generation, analysts expect higher plant load factors for thermal utilities and companies involved in the coal supply chain.

Experts also note that energy security will remain a major concern for India in the coming decade. Reforms such as the proposed Electricity Amendment Bill, 2025 aim to strengthen the sector by promoting competition, improving renewable energy compliance, and enhancing the financial sustainability of power distribution companies.