Target: ₹230
CMP: ₹215.65
Macquarie has initiated coverage on Adani Power with a target price of ₹230/sh (15x 2 year forward EV/EBITDA)
India’s power demand outlook remains structurally robust despite a recent slowdown in growth, with underlying fundamentals supported by diverse, non-cyclical drivers. Demand is increasingly anchored by an expanding industrial base, rising 24×7 commercial loads from data centres and a sharp, non-linear increase in residential cooling demand.
Recent peak demand of about 271 GW in May, driven by an intense heatwave, highlights tightening supply-demand dynamics, with minimal operating headroom and even marginal deficits during solar hours, underscoring sustained system stress amid structurally rising demand.
India’s power value chain stands on a structurally sound footing, driven by a synchronised turnaround across generation, transmission and distribution. In generation, capacity addition is happening at about 50 GW/year, spearheaded by renewables. In transmission, networks are undergoing a record capex cycle as part of a broader ₹9-lakh crore long-term grid expansion plan.
Most critically, long-standing discom financial health has fundamentally turned the corner; distribution companies achieved a historic, positive all-India net profit of about ₹2,700 crore, as AT&C losses compressed to about 15 per cent (versus about 23 per cent in FY14) and strict late payment surcharge rules successfully liquidated nearly 96 per cent of legacy generation dues by early 2026.