shares have gained 27% so far in 2026, and domestic brokerage Elara Capital has initiated coverage on the stock with an ‘Accumulate’ rating and a target price of ₹220, implying an upside of over 16% from its closing price of ₹189 on the BSE on Friday, 9 October.
In its coverage initiation report, Elara Capital said the company offers strong medium-term growth visibility, supported by a substantial capacity expansion pipeline, increasing long-term power purchase agreement (PPA) coverage and opportunities in the merchant power market. However, the brokerage cautioned that much of the company’s growth potential is already reflected in its current valuation.
Elara Capital has set its target price at ₹220, based on 12 times its estimated FY29 enterprise value-to-EBITDA (EV/EBITDA).
However, Adani Power shares have remained under pressure in the near term, declining 4.04% over the past week and 6.90% over two weeks. The stock has fallen 11.89% in the past month and 12.62% over the last three months, indicating sustained weakness in recent trading.
Thermal power to remain critical to India’s energy security
Elara Capital believes thermal power will continue to play a crucial role in India’s power system over the near- to medium-term by providing reliable, dispatchable baseload electricity to complement the growing share of renewable energy.
The brokerage noted that the intermittent nature of renewable energy, transmission constraints and increasing grid-balancing requirements reinforce the need for dependable thermal generation. Battery energy storage systems and pumped storage are also expected to play a complementary role as renewable energy penetration rises.
Against this backdrop, coal-based power is likely to remain important for India’s energy security. Elara Capital highlighted the country’s target of adding around 80 GW of coal-based power capacity by FY32, providing a supportive backdrop for thermal power producers such as Adani Power.
42 GW capacity target offers growth visibility
Adani Power, India’s largest private thermal power generator, currently operates 18.3 GW of capacity across 13 assets, comprising predominantly high-efficiency supercritical and ultra-supercritical thermal power plants.
According to Elara Capital, the company’s locked-in expansion pipeline of 24 GW could take its total targeted capacity to 42 GW, providing significant visibility for medium-term growth.
Around 60% of the planned expansion is brownfield, which could support faster execution and lower project costs compared with greenfield developments. The brokerage also noted that 13.3 GW, or around 55% of the locked-in expansion pipeline, is backed by long-term PPAs.
The remaining capacity offers exposure to merchant power opportunities, where electricity is sold in the market rather than under long-term contracted arrangements. Elara Capital believes this could provide additional upside as electricity demand grows and peak power shortages persist.
Beyond its existing expansion plans, Adani Power continues to pursue additional thermal capacity through state-level bidding opportunities, the brokerage added.
Acquisition strategy offers another avenue for growth
Elara Capital also highlighted Adani Power’s track record of acquiring and turning around stressed and underutilised thermal power assets.
The brokerage cited acquisitions such as Udupi Power (1.2 GW), Coastal Energen (1.2 GW) and Lanco Amarkantak as examples of the company’s approach to expanding its portfolio and unlocking value from assets.
According to Elara Capital, this acquisition strategy provides an additional, potentially capital-efficient route to capacity expansion alongside the company’s organic growth plans.
Valuations already factor in much of the growth potential
Despite the strong expansion outlook, Elara Capital cautioned that a significant portion of Adani Power’s medium-term growth opportunity may already be priced into the stock.
The brokerage noted that the shares have rallied 27% year-on-year, outperforming the BSE Utilities Index. While the company’s capacity expansion, increasing PPA coverage and merchant power opportunities support earnings visibility, the current valuation limits the extent of upside the brokerage sees.
Elara Capital has therefore initiated coverage with an ‘Accumulate’ rating and a target price of ₹220, based on an estimated FY29 EV/EBITDA multiple of 12x. The target implies over 16% upside from the stock’s ₹189 closing price on 9 October.
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