The mercury is heating up, and so can your portfolio returns. With India expected to experience above normal temperatures in the coming months, amid increased likelihood of severe heatwaves in the three months till May, investors can look to make the most of it by betting on certain segments of the Indian stock market.
According to the IMD, temperatures during the March-May 2026 period are likely to remain above normal across most parts of the country, with a higher number of heatwave days in several regions. Early March has already seen temperatures 4-8°C higher than normal in several areas, indicating that summer-like conditions have started earlier than usual.
Such conditions could lift electricity demand in the country to meet peak load. India expects a surge in peak power demand to a record during the hot season, where the use could top out at 283 gigawatts during the most extreme periods, a 13% jump compared to the current record of 250 gigawatts set in the summer of 2024, suggested a Bloomberg report.
Power companies to get charged up!
This is expected to benefit power sector companies, and air conditioners, coolers and fan manufacturers, suggest experts. With deficits anticipated in gas and hydro amid the US-Iran war and peak summers, JM Financial expects higher PLFs for thermal utilities and the coal value chain.
The BSE Power and BSE Utilities indices are up 2-3% in the last week alone.
Dr Ravi Singh, Chief Research Officer from Master Capital Services, said that power producers like NTPC Limited, Tata Power Company Limited, and Adani Power Limited may benefit from record electricity demand as cooling needs rise across the country.
For JM Financial, the pecking order remains: Adani Power >Tata Power >NTPC > Adani Green > Coal India > JSW Energy.
Cool returns likely for AC manufacturers
Naturally, one of the biggest beneficiaries could be companies linked to cooling products and appliances amid peak temperatures.
“When temperatures start crossing 42–45°C in many parts of the country, air conditioners and cooling appliances quickly move from being discretionary purchases to essential ones,” said Singh.
In a strong El Niño scenario marked by an early, intense and prolonged summer, AC demand (from being a luxury to a necessity) could significantly exceed current expectations. Low penetration levels (~8-10%), impulse buying, stronger replacement demand and deeper Tier-II/III penetration could drive industry volume growth materially above guidance, according to Anand Rathi Research.
The brokerage expects re-rating potential for leading AC stocks amid strong cash flows, lower trade scheme and better absorption of fixed cost, which may result in earnings upgrade.
For Coolers, stronger summer intensity can enhance realisation, reduce channel discounting and support margin, while fan-focused consumer durable companies could benefit from volume growth and improved mix towards premium and energy-efficient models, it opined.
Anand Rathi recommended PG Electroplast, Blue Star, Havells, Orient Electric, Crompton Greaves Consumer, and Voltas as top stocks to buy.
Echoing similar views, Singh also voiced bullish views on Tata Group’s Voltas Limited, along with Blue Star and Havells India. At the manufacturing level, PG Electroplast Limited may also benefit as it supplies components to the broader appliance ecosystem, said the expert.
Demand surge likely for ice-cream, beverage makers
The beverage and dairy segments also tend to perform well during intense summers.
Varun Beverages Limited and Emami Limited typically see higher sales during the April–June quarter, said Singh. While Hatsun Agro Product and Vadilal Industries, which operate in the ice cream and dairy segment, usually witness higher demand during peak summer, opined Abhinav Tiwari, Research Analyst at Bonanza.
Flip side: Inflation shocks likely
The other side of the coin of severe heatwaves is the impact on food production, which could also impact RBI’s rate trajectory.
Nitant Darekar, Research Analyst at Bonanza, said that the RBI has flagged food inflation as increasingly “endemic,” and the numbers bear this out — India’s average food inflation has more than doubled from 2.9% between 2016–20 to 6.3% in the 2020s.
“With agriculture employing nearly half the workforce and contributing ~18% to GDP, a harsh summer isn’t just uncomfortable — it’s a meaningful upside risk to CPI that could complicate RBI’s rate trajectory,” he added.
Any prolonged hot weather this month may pull down India’s wheat output below last season’s record, suggested a Bloomberg report.
Wheat is vulnerable because it is currently in the grain-filling stage in key producing states like Punjab and Haryana. If temperatures remain unusually high during this period, crop yields and grain quality could suffer. Even a moderate drop in wheat production — say around 10–15% — could tighten domestic supply.
This becomes more concerning when government buffer stocks are not as comfortable as they were in earlier years, as lower supply tends to push prices higher fairly quickly, cautioned Singh.
If wheat and vegetable prices start rising together, it could complicate the inflation outlook and make it harder for the central bank to move toward interest rate cuts, he added.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
