Jefferies’ power play after RBI’s 25 bps rate hike: 7 stocks with up to 53% upside

This is after the Reserve Bank of India’s 25 basis point rate hike has put interest-sensitive sectors back in focus. The global investment bank Jefferies published its India utilities outlook on 7 October 2026.

Jefferies expects companies with regulated returns, fixed-rate debt and interest-cost pass-through mechanisms to have greater protection.

At the same time, Jefferies sees potential in several power stocks after their recent correction. Its top picks are Adani Energy Solutions, JSW Energy and NTPC, with target prices suggesting upside of up to 53%.

Jefferies names three top power picks

Jefferies in its report added that Adani Energy Solutions, JSW Energy and NTPC remain its preferred stocks in the sector.

The global investment bank has a ‘Buy’ rating on all three. It has set a target price of Rs 2,060 for Adani Energy Solutions, Rs 720 for JSW Energy and Rs 425 for NTPC. These targets imply potential upside of 53%, 45% and 32%, respectively, from their market prices.

The report also carries Buy ratings on Adani Power, Power Grid, Adani Green Energy and Torrent Power. Their target prices imply upside of 33%, 23%, 29% and 44%, respectively.

Why higher rates may not hurt all stocks equally?

As per the Jefferies report, the Reserve Bank of India’s 25 basis point rate hike to 5.5% was largely expected. However, the change in stance has raised expectations of further rate increases.

“Power companies have some protection against hikes between regulated equity, fixed rate loans and lower rate hike pass through,” the report noted.

NTPC, Power Grid and Adani Energy Solutions are expected to see a relatively limited impact on earnings from higher rates.

According to Jefferies, NTPC and Power Grid have 36-57% of their loans on a fixed-rate basis. More than 70% of their gross block is also under regulated returns, where interest costs can be passed through.

For Adani Energy Solutions, more than 65% of loans are fixed-rate, which provides another layer of protection.

Jefferies expects Adani Green to see more than a 15% impact on earnings per share from a 100 basis point rise in rates. However, the brokerage noted that longer-tenure fixed-rate overseas loans and refinancing after projects become operational could reduce the impact.

Could power shortages return?

Power demand has risen 10% year-on-year so far in 2026, while generation increased 13% year-on-year in September.

Jefferies expects the possibility of power shortages returning in the coming months to remain an important factor for the sector.

“15-30% stock price correction from peak – shortages could reappear in 4-5 months,” the report added.

Jefferies expects higher merchant power prices to potentially offset some of the interest-rate impact on JSW Energy. It also sees scope for higher merchant tariffs to improve the trading business of Adani Energy Solutions.

Recent correction creates stock-specific opportunities

According to the Jefferies report, the power sector remains constructive despite the recent correction in several stocks.

Jefferies believes the decline from peak levels over the past five to six months has created stock-specific opportunities rather than a broad sector-level concern.

“We remain constructive on the power sector overall and believe the recent correction in stocks from peak levels in the last 5-6 months is a stock-specific buying opportunity,” the report added.