Overview

• ICRA projects electricity demand growth of 5–5.5% in FY2026, down from a longer-term 6–6.5% CAGR estimate, due to the early onset of an above-average monsoon.
• Power generation capacity additions are expected to reach an all-time high of 44 GW in FY2026, supported by renewable projects and 9–10 GW of new thermal installations.
• Thermal plant load factors are forecast to remain robust at around 70% for FY2026, underpinned by steady coal-based generation.
• Coal stocks at domestic power plants climbed to a five-year high by May 21, 2025, providing roughly 20 days of inventory for uninterrupted operations.
• Power distribution companies face a projected cash shortfall of about 35 paise per unit in FY2026, reflecting persistent gaps between supply costs and tariff revenues.