Market expert Raja Venkatraman of NeoTrader has identified two promising energy sector stocks for investment consideration, as India's renewable energy landscape undergoes rapid transformation. The recommendations come amid a challenging market environment where the Sensex has declined 2,186 points over five sessions, highlighting the importance of sector-specific opportunities in the energy space.

India's Energy Storage Revolution

India's energy storage sector stands at a critical juncture, driven by the dual challenges of integrating surging renewable capacity and maintaining grid stability as peak power demand approaches 300 GW. The country's renewable capacity has already exceeded 254 GW, accounting for approximately 26% of electricity generation and touching a record 51% on a single day.

India crossed the 50% non-fossil capacity mark in 2025, reaching around 262-263 GW of installed non-fossil power, achieving this milestone five years ahead of its Nationally Determined Contribution targets. The combined installed and pipeline capacity now stands at roughly 507 GW, with the country adding nearly 50 GW of renewable capacity in 2025 alone, supported by investments of approximately ₹2.00 trillion.

Storage Infrastructure Requirements

Managing peak demand nearing 300 GW and annual electricity demand growth of 6-7% will require an estimated 230 GWh of energy storage capacity by 2030 to ensure grid flexibility and round-the-clock reliability. The Central Electricity Authority now estimates total storage requirements of about 411 GWh by 2031-32, of which nearly 236 GWh is expected to come from battery energy storage systems.

Policy support measures include ₹5,400.00 crore in viability gap funding for 30 GWh of BESS projects with 20% domestic value addition, transmission charge waivers until 2028, and state-level mandates such as Rajasthan's requirement of 5% storage capacity for renewable projects above 5 MW.

Stock Recommendations

NTPC - Primary Pick

Venkatraman recommends NTPC , India's largest integrated energy company, as a buy above ₹340.00 with a stop loss at ₹320.00 and target price of ₹395.00.

The recommendation is based on technical indicators showing the stock has been surviving recent market falls with strong bullish undercurrents. The ADX/DMI indicators suggest a new phase has begun, with the company's foray into nuclear energy and long-term capacity targets providing fundamental support.

NHPC - Secondary Pick

NHPC, India's largest hydropower developer, is recommended as a buy above ₹83.00 with a stop loss at ₹79.00 and target of ₹93.00.

The stock has been consolidating after strong performance, with prices holding recent trendlines and RSI in the neutral zone, indicating potential for upward movement. As a major force in India's renewable energy landscape managing numerous hydroelectric power stations, NHPC is positioned to benefit from the sector's growth trajectory.

Risk Considerations

Both recommendations carry sector-specific risks including payment delays, interest rate fluctuations, and cost overruns in large projects. NTPC faces operational challenges related to coal cost dependency, while NHPC's operations are heavily dependent on geological conditions and capital-intensive project timelines.

NTPC Limited and Maharashtra State Power Generation Company Limited (Mahagenco) have signed a strategic agreement for the acquisition of Solapur Thermal Power Limited (STPL). The deal represents a major consolidation move in India's power generation sector, with significant financial implications for both organizations.

Acquisition Details

The agreement between the two power sector giants involves the acquisition of STPL at a substantial investment cost. The financial parameters of this strategic transaction are outlined below:

Strategic Significance

This acquisition agreement marks an important development in the Indian power sector, bringing together NTPC's extensive experience in power generation with Mahagenco's regional expertise in Maharashtra. The partnership is expected to leverage the strengths of both organizations to enhance operational efficiency and expand generation capacity.

Financial Impact

The ₹38,000.00 crore investment represents a significant financial commitment from both NTPC and Mahagenco. This substantial investment underscores the strategic importance of the STPL acquisition in the companies' expansion plans and their commitment to strengthening India's power generation infrastructure.

Market Implications

The signing of this agreement demonstrates the ongoing consolidation trend in India's power sector, where established players are joining forces to acquire strategic assets. This collaboration between NTPC and Mahagenco is expected to create synergies that could benefit the overall power generation landscape in the region.