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PL Capital Sees Further 30% Upside in Adani Power
Adani Power’s share price has gone up a lot this year.
It has performed better than the broader Sensex index.
PL Capital, a brokerage firm, believes the shares could rise further.
It gave the stock a buy rating and a target price of ₹259.
The firm expects Adani Power to earn more as it expands its electricity-generating capacity.
It also said new long-term power agreements could support revenue.
Adani Power plans to increase capacity substantially by FY32.
PL Capital expects the company’s debt compared with its earnings to fall over time.
Adani Power shares have risen over 35% year-to-date and more than 30% in six months, outperforming the Sensex.
PL Capital initiated coverage with a buy rating and set a target price of ₹259, implying nearly 30% upside from ₹199.60.
The brokerage cited strong earnings growth, improving capital efficiency, declining leverage, and recently signed power purchase agreements.
Adani Power plans to expand capacity from 18.3GW in FY26 to 41.9GW by FY32, with nearly ₹2 lakh crore in planned capital expenditure.
PL Capital forecasts 21% EBITDA growth annually during FY26–29E and expects net debt/EBITDA to decline to about one times by FY32.
- Who
- Adani Power and brokerage firm PL Capital.
- What
- PL Capital initiated coverage of Adani Power with a buy rating and a ₹259 target price.
- Where
- India, with the stock trading on the BSE.
- When
- The assessment was reported on 25 September; the estimates cover FY26–FY32.
- Why
- PL Capital expects strong earnings growth, improved capital efficiency, declining leverage, capacity expansion, and support from power purchase agreements.
Key facts
- Recommendation
- Buy, according to PL Capital
- Target price
- ₹259
- Reference price
- ₹199.60 closing price on 24 September
- Recent performance
- Up over 35% year-to-date and more than 30% in six months
- Capacity plan
- Increase from 18.3GW in FY26 to 41.9GW by FY32
- Planned capital expenditure
- Nearly ₹2 lakh crore
- EBITDA forecast
- 21% compound annual growth during FY26–29E
Quotes
PL Capital
Brokerage firm providing equity research and investment recommendations
“The nearly ₹2 lakh crore expansion capex (nearly ₹8.4 crore/MW) is manageable, with net debt/EBITDA expected to peak at just 2.5 times in FY29E, among the lowest across peers. Importantly, execution risk is relatively contained, with 100% of land and BTG equipment secured, nearly 60% of capacity additions planned at brownfield sites, and 56% of the expansion pipeline already tied up under long-term PPAs.”
livemint.com
“We value Adani Power at 18 times September 2028E EBITDA, deriving a target price of ₹259, equivalent to nearly 10.5 times FY32E EBITDA on a 12.5% discount rate. The premium valuation is supported by stronger earnings growth, improving capital efficiency, and declining leverage.”
livemint.com
Sources
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