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India's power sector witnessed a recovery in demand in December 2025, which helped cushion the overall weakness seen during the third quarter of FY26, even as unseasonal rains and lower temperatures weighed on demand for most of the quarter, according to a report by Nuvama Research.
The report said power demand rose 6.8 per cent year-on-year in December 2025, marking a steady revival after a weak start to the quarter. It also expects modest profit growth across its power sector coverage universe in Q3FY26. The report stated, "We forecast modest PAT (Profit After Tax) growth across Nuvama Power coverage in Q3FY26, led by weak thermal PLFs (Plant Load Factor). However, the report also mentioned that for the full Q3FY26 period, demand declined marginally by 0.4 per cent year-on-year, mainly due to unseasonal rains in October and lower average temperatures of 23 degrees Celsius compared to 25.7 degrees Celsius in Q3FY25. Peak power demand remained strong despite the muted quarterly performance. Peak demand increased to around 241 gigawatts in Q3FY26, up 7.6 per cent from the year-ago period, indicating underlying strength in electricity consumption during high-demand periods. On the generation side, thermal power continued to dominate the mix, accounting for nearly 77 per cent of total generation during Q3FY26. However, plant load factors (PLFs) across utilities remained muted. The report also noted that power exchanges saw mixed trends. Electricity volumes on the Indian Energy Exchange (IEX) grew only modestly, with volumes rising 3 per cent year-on-year in December 2025 and 12 per cent in Q3FY26. Overall volumes, including renewable energy certificates, declined due to weak REC demand. Power prices during solar hours increased, while non-solar hours witnessed stronger demand and widening peak deficits. Coal availability improved during the quarter, with coal stocks at NTPC plants at around 18 days and overall inventory piling up to about 54 million tonnes, up 18 per cent year-on-year. Looking ahead, Nuvama expects modest profit growth across its power sector coverage universe in Q3FY26. Renewable energy tendering remains strong, with a pipeline of around 350 GW, largely driven by solar and storage projects. (ANI)
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