Target: ₹187
CMP: ₹145.30
Adani Power Ltd (APL) is set for a multi-year earnings upcycle, driven by a 2.3x capacity expansion from 18.15 GW in FY25 to 41.9 GW by FY33E. The company has transitioned from a stressed thermal IPP into most efficient private baseload power producer. India’s structural power upcycle — supported by 6 per cent demand CAGR over FY22-32E and rising peak needs from EVs, data centers, AI, and manufacturing — creates a strong tailwind for coal power.
APL has secured a dominant 70 per cent share of the ongoing state-led thermal PPA awards (12.4 GW of 17.7 GW), highlighting its cost and execution advantage. Earnings visibility is strong, with 90 per cent of operational capacity and 67 per cent of the 41.9 GW portfolio tied under long-term PPAs. New PPAs offer higher fixed charges and fuel security is supported by SHAKTI-linked FSAs.
We expect consolidated revenue/EBITDA/PAT to grow at 16/19/17 per cent CAGR over FY25-32E.
We initiate coverage on APL with Buy rating and a TP of ₹187, valuing the stock at 15x FY28E EBITDA (supported by a DCF), reflecting its scale-led cost advantage, superior growth visibility, and long-dated cash flow runway.
Risks: Execution delays; fuel-supply volatility; regulatory risk; merchant price risk; and capex overruns.