Energy Security to Fuel Multi-Year Capex Cycle in India: 360 ONE Advises Buying on Dips

The brokerage said the policy lens has shifted from affordability and decarbonisation to resilience, reliability and reduced import dependence, creating opportunities across the entire energy value chain. "What markets are confronting is not just the risk of temporary supply disruption, but the emergence of a more fragmented, security-driven global energy order, in which resilience, redundancy and domestic capacity creation carry a higher policy premium than before," it noted.

India's high import dependence remains a vulnerability, with crude oil imports at 89%, natural gas at 50% and coal at 23%. This exposes the economy to external account pressure, imported inflation and currency volatility during periods of disruption. At the same time, energy demand is rising structurally, driven by urbanisation, industrialisation, transport growth, digital infrastructure and broad-based electrification. The challenge, 360 ONE said, is not to cut consumption but to reduce sensitivity to imported energy shocks.

The investment opportunity is divided into three layers. The first comprises direct energy-security beneficiaries such as utilities, domestic fuel suppliers, thermal equipment makers, transmission firms, storage providers, upstream hydrocarbon players and power financiers. The second includes enabling infrastructure beneficiaries like cables, pipes and grid equipment suppliers that support the buildout of a secure and reliable energy system. The third covers substitution and long-duration themes such as ethanol, nuclear and selective EV-linked opportunities, which remain more dependent on policy support and execution over the longer term.

Power utilities and coal-linked reliability remain the anchor of India's energy security. Coal still accounts for over 70% of electricity generation and is critical for baseload and peak-demand management. With India likely to add up to 80 GW of new coal capacity by 2032 alongside renewable expansion, the "Thermal + Renewable" framework is expected to dominate. Key beneficiaries include NTPC, JSW Energy, NLC India, Adani Power, CESC and Coal India.

Renewables are moving beyond decarbonisation to become a strategic domestic resource that reduces reliance on imported fuels. Non-fossil capacity has crossed 220 GW, with India on track for its 500 GW target by 2030. Solar remains the most compelling segment due to cost competitiveness and scalability, while policy measures like ALMM and viability gap funding for storage are making the theme more execution-oriented.

Transmission and cables are emerging as core enablers. A geographically dispersed renewable buildout requires faster interstate corridors and technologies like HVDC, creating a structurally elevated capex cycle across conductors, transformers and EPC firms. Similarly, the cables and wires segment benefits from rising transmission line additions, HVDC adoption and demand from data centres and industrial expansion.

Ethanol and pipes represent clear substitution plays. India has already achieved 20% ethanol blending, with policy support for multi-feed distilleries helping reduce sugar earnings cyclicality. In pipes, the "One Nation, One Gas Grid" initiative and Jal Jeevan Mission 2.0 are driving demand for steel, DI, HDPE and PVC pipelines, while global data centre and GCC infrastructure spending add to the outlook. Key beneficiaries include Jindal SAW, Welspun Corp and Likhita Infrastructure.

Battery Energy Storage Systems (BESS) are becoming critical to manage renewable intermittency, with India targeting 236 GWh by 2032. Domestic players with manufacturing and utility relationships are well placed to benefit.

In oil and gas, the focus is on reducing vulnerability through strategic reserves, pipeline connectivity and domestic exploration, supporting opportunities for ONGC, Oil India and Engineers India. Power financiers like PFC and REC also provide a financial proxy to the capex cycle, while nuclear is emerging as a long-duration pillar with a multi-year demand pipeline for heavy engineering and reactor components.

- ANI