In a fresh note on utilities, MOFSL said several power sector stocks have rerated sharply and valuations are no longer inexpensive, but it sees upside risks to earnings. It cited ACME Solar’s earnings upside risk in the June quarter, led by strong merchant prices post the commercial operation of 2.3GWH of BESS capacity.

Suzlon Energy, Inox Wind
The wind equipment segment has witnessed relatively moderate investor traction, but MOFSL said there is renewed energy security concerns in Europe have revived interest in offshore wind.
This trend could have positive implications for Indian wind turbine manufacturers, it said.

"New product launches, targeting varied wind regimes, are expected to enhance export competitiveness. While Suzlon remains a bellwether play in the segment, other players such as Inox Wind are also witnessing improving investor interest, supported by relatively attractive valuations," it said.

Tata Power, PowerGrid
"The utilities sector is trading at a P/E of 20.2 times (up 51 per cent against the 10-year average of 13.4x). NTPC, Tata Power, and PowerGrid are trading near/above Mean +1SD (1-year forward  P/E), while wind players such as Suzlon Energy Ltd /Inox Wind Ltd, despite likely strong earnings CAGR of 32-31 per cent over FY25-28E, are trading near/below Mean -1SD (1-year fwd P/E)," MOFSL said.

JSW Energy, Adani Power
MOFSL said elevated merchant tariffs, driven by seasonal demand, are expected to support
profitability for players with higher untied capacity such as JSW Energy, Adani Power. At the same time, the impact on NTPC is likely to remain relatively muted given its regulated portfolio mix, it said.

Waaree Energies, Premier Energies
"Following a 29 per cent/35 per cent rally in Waaree Energies and Premier Energies, the valuation premium over smaller domestic players has risen sharply. Focus continues to remain on structural oversupply in modules, the pace of utilization ramp-up in cell manufacturing, timelines for ingot-wafer localization, and the potential for further backward integration into polysilicon," it said.

JSW Energy, NTPC, NTPC Green

MOFSL said JSW Energy Ltd 's Rs 2.5/kWh higher merchant realization could lift FY27 profit by 10 per cent, noting that the stock has been flat over the last six months. On NTPC Ltd, which has risen 21 per cent in the last six months, MOFSL said the PSU has no meaningful earnings impact from higher merchant prices. That said, there is downside risk to NTPC Green Ltd ’s 8GW FY27 commissioning. The stock is up 10 per cent in six months.

Indian Energy Exchange (IEX)
For IEX, MOFSL said the market coupling continues to act as a key overhang on investor sentiment, though valuations at 21.7 times FY28 earnings suggest limited downside risk.

"Investor concerns are primarily centered around the implementation timeline of market coupling in the Day-Ahead Market (DAM), with potential extension to RTM and other segments. Additionally, regulatory risks, including potential transaction fee revisions, remain key sensitivities for the stock," it said.