Adani Power Receives 'Buy' Rating with Target Price of Rs 187
Adani Power's Growth Prospects
New Delhi, Dec 16: Antique Stock Broking has recently begun coverage of Adani Power Limited (APL), assigning it a 'Buy' rating and establishing a target price of Rs 187 per share.
Currently priced at approximately Rs 144, the brokerage anticipates a potential upside of around 30%, fueled by robust earnings visibility, significant capacity expansion initiatives, and an improving financial position.
According to their report, Adani Power is poised to enter a prolonged earnings growth phase, driven by a substantial increase in capacity and the rising demand for electricity in India.
The company aims to more than double its installed capacity from 18.15 GW in FY25 to 41.9 GW by FY33.
This expansion strategy positions Adani Power as the leading private sector baseload power producer in India, marking a significant shift from its previous status as a distressed thermal power entity.
The report emphasizes that India is experiencing a structural uptrend in power demand, with electricity consumption projected to rise at an annual rate of 6% from FY22 to FY32.
Increased demand from sectors such as electric vehicles, data centers, artificial intelligence, and manufacturing is further elevating peak power requirements, reinforcing the necessity for dependable coal-based power generation.
Antique noted that Adani Power has established itself as a frontrunner in the current state-led thermal power procurement cycle.
The company has successfully secured approximately 70% of the awarded capacity, having won 12.4 GW out of a total of 17.7 GW allocated.
This achievement highlights its cost efficiency, strong execution capabilities, and project readiness.
Adani Power's earnings visibility remains robust, with nearly 90% of its operational capacity and about 67% of its total 41.9 GW portfolio already secured through long-term power purchase agreements.
Antique forecasts that Adani Power's consolidated revenue, EBITDA, and profit after tax will grow at impressive rates of 16%, 19%, and 17%, respectively, between FY25 and FY32.
The brokerage also mentioned that the company intends to finance around 60% of its nearly Rs 2 lakh crore capital expenditure through internal accruals.
This strategy is expected to facilitate steady deleveraging, with net debt-to-EBITDA anticipated to drop below 1x by FY32, while return on equity is projected to remain above 15%.