Power stocks to watch: Suzlon, NTPC among Ambit’s top picks; Torrent Power gets a miss

India just handed out 18–19GW of new thermal power projects, kicking off a fresh private-sector coal capex cycle. A new tender system (Sec-63) plus a coal-cost safety net (SHAKTI) means new plants could earn 18–20% returns, making the math attractive again. There's a lot more where that came from too — of the ~50GW still to be tendered, ~15GW could come from UP, Gujarat, West Bengal and Uttarakhand this year alone. Power supply itself looks steady: Ambit Capital's thematic report on Utilities says a shortage is unlikely through FY32, even as peak demand hits ~340GW. The wildcard is batteries — if storage (BESS) crosses 47GW/188GWh by FY32, India could have more power than it needs, cooling demand for new coal plants. Renewables are already nipping at coal's heels too: a recent round-the-clock renewable tender came in at ₹5.25–5.26/unit, cheaper than several thermal deals, though it doesn't fully price in storage and grid costs.

Here's how Ambit has rated utility stocks using their valuation methodology and pointed out the risks each face as well.

Pros: Built on a strong 15% EBITDA growth run through FY27. Higher coal prices would actually boost profits from its Indonesian coal business. There's room for upside from more renewable energy investments beyond what's already priced in.

Cons: The target leans on assumptions like $85/tonne coal prices holding; any major swing in coal costs or execution on new projects could move the numbers.

Pros: If LNG gas prices fall further, its gas-based power business could see upside. New opportunities from state power distribution deals (DISCOMs) could add growth.

Cons: Ambit rates this a SELL - the current price already looks to be pricing in more than the DCF-based target of ₹1,270 supports.

Pros: India's biggest power generator, with value spread across thermal, renewables, nuclear and coal mining. Ambit likes the diversification.

Cons: Slower power demand growth (around 6%), falling battery storage prices, or delays in commissioning new projects could all weigh on the stock.

Pros: A steady, regulated business with visibility on future capital spending — over ₹2 trillion planned over the next 5 years.

Cons: Ambit rates this a SELL. Winning that capex needs more discipline in competitive bidding, and the current price doesn't leave much room for upside.

Pros: A pure play on India's wind energy build-out, with Ambit expecting strong earnings growth (target implies 31x FY28 earnings).

Cons: New grid balancing rules (DSM regulations) could hurt returns for wind project developers. A broader slowdown in power demand could also mean fewer new wind orders.

Pros: Aiming for massive scale, 112GW by FY40 and 291GW by FY50, with an expected 9% EBITDA growth over the long run. Its low-cost debt and land access give it an edge in winning renewable projects.

Cons: Ambit rates this a SELL. Ironically, if interest rates fall, it helps existing projects but means lower tariffs — and thus lower returns — on new ones.

Pros: Expected to roughly 4x its EBITDA and 2x its profit by FY30 versus FY25 levels — a big growth ambition.

Cons: Ambit rates this a SELL. Demand growth of 5% or less, higher power curtailments, or higher interest rates could all derail that growth story.

Pros: A solar cell and module maker riding India's renewable build-out, valued using long-term cash flows through FY35.
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Cons: Ambit rates this a SELL. Weak power demand growth could mean fewer solar tenders, and rivals ramping up new manufacturing lines faster than expected could squeeze margins.

Emmvee (BUY, ₹380): Valued at 9x FY28 EBITDA. Risk: new competing cell lines over the next 18–24 months, plus any slowdown in solar demand, could pressure margins.
Saatvik (BUY, ₹510): Valued at 6.5x FY28 EV/EBITDA. Same risks apply — rising competition from new capacity and softer power demand could weigh on margins.
Source: Ambit Capital thematic report on Utilities