Tata Power vs Adani Power: As temperatures soar, which stock will shine?

The shares of Tata Power and Adani Power have recorded a sharp surge recently as rising temperatures with heatwave warnings issued for several parts of India spurred hopes for heightened power demand in the near-future. Analysts have suggested which stock can provide a better risk-reward ratio.

The India Meteorological Department (IMD) has issued a heatwave alert for several parts of India, and warned that maximum temperatures across northwest India can likely rise by 2-4°C over the coming week.

According to the latest weather updates, parts of North India are likely to experience severe heatwave conditions, raising concerns over public health and heat-related illnesses. Typically, such hot summer days see heightened power demand.

Hot summer = soaring power demand

JM Financial, in its latest report, said that average daily energy demand during the last week rose 10% YoY to 5,124 MU. In an earlier report, the domestic brokerage had highlighted that after a rare western disturbance led to unreasonably cold conditions earlier this year, but the sky is clearing up and temperatures are rising. Additionally, 2026 is expected to be an El Niño year, which is marked by above-normal temperatures.

JM Financial explained how power demand peaked during the previous El Niño years. It highlighted that the El Niño during 2015 led to an extended hot and humid weather up to October 2015. Peak demand grew 4-5% during September-November versus 1% in FY16 during that time. During the summer of April–June 2019, another El Niño year, the average temperature was 2.8°C higher on 64 days out of 91 days. Peak demand grew at an unprecedented 7-9% during April-June of 2019, it said.

Later in 2023, El Niño-driven dry conditions led to a five-year low in monsoon rainfall (94% of LPA) with extreme hot and humid conditions during June-August 2026. “All in all, we anticipate a shortfall in hydro generation (negative for NHPC, SJVN), spike in coal-fired generation (positive for NTPC, Adani Power), extension of Section-11 (Tata Mundra) and high merchant prices (Adani Green, Adani Power),” the domestic brokerage concluded.

“India’s peak power demand has already climbed to nearly 239 GW on April 18, above last year’s April level, and the government expects peak demand to reach 271 GW this summer. The Ministry of Power has also said that despite Middle East-related fuel disruptions, coal-based generation, renewables and storage are being leaned on to bridge the gap,” said Harshal Dasani, Business Head at INVasset PMS.

Adani Power share price

Adani Power shares have gained more than 12% in one week and over 34% in one month. The stock jumped more than 37% in 2026 so far. In the longer term, the shares of the company rallied more than 411% in three years and a whopping 1,069% in five years.

According to Dasani, Adani Power looks better positioned for a sharper near-term stock move, while Tata Power remains the steadier medium-term compounder. “Adani Power had 18,150 MW of installed capacity in Q3 FY26, sold 71.8 BU in 9M FY26, and delivered Rs 15,713 crore EBITDA over the same period, which makes it a more direct play on heat-driven electricity demand,” he said.

Tata Power share price

Tata Power shares have gained over 6% in one week and more than 8% in one month. The stock is up nearly 14% in 2026 so far. In the longer term, the shares of the company rallied by over 122% in three years and by more than 365% in five years.

Dasani from INVasset PMS believes that although Adani Power appears better-positioned amid the ongoing heatwave, Tata Power should not be overlooked. "Its advantage is business mix: 16,310 MW operational capacity, a sizable clean-energy pipeline, rooftop solar execution, and the added trigger that the government has specifically directed operation of Tata Power’s 4,000 MW Coastal Gujarat Power plant from April 1, 2026, to support summer supply," he said.

Adani Power vs Tata Power: Which stock should you buy?

For investors seeking the best tactical heatwave trade, Adani Power is the buy now, Dasani said. He added that for those wanting lower volatility and a broader energy-transition story, Tata Power is the more balanced choice.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)