Adani Power’s Stock Set for 54.5% Upside Potential in Next 24 Months, Says Ventura

New Delhi: Adani Power Ltd, India’s largest private coal-based thermal power producer, is poised for significant growth in the coming years, according to a new report by brokerage firm Ventura.

With enhanced coal availability, business expansion, and surging power demand, Ventura has revised its stock target price to Rs 806, indicating a remarkable upside potential of 54.5 percent over the next 24 months.

Strong Growth Drivers for Adani Power

The growing power demand in India, driven by increased manufacturing activities and the rising adoption of white goods and electronic gadgets in households, is playing a crucial role in fueling Adani Power’s growth.

Despite the efforts to meet the rising energy needs through renewable sources, the gap between peak demand and supply continues to widen, highlighting the need to augment base load thermal power capacity.

Adani Power, with its strategic position as the largest private thermal power producer in India, is well-equipped to address this demand with its robust capacity expansion plans.

The company currently boasts an installed capacity of 17.55 GW and has outlined ambitious plans to increase this to 30.67 GW by FY31. This will not only expand its footprint in India’s thermal power sector but also contribute to the nation’s energy needs.

Ventura’s Bullish Outlook on Adani Power Stock

Ventura has revised its price target for Adani Power to Rs 806 based on a discounted cash flow (DCF)-based analysis, representing an upside of 54.5 percent from the stock’s current trading price of Rs 522.

The brokerage recommends a ‘BUY’ rating for the stock, noting that Adani Power’s strong fundamentals, coupled with its continued investments in thermal power capacity, position it well for future growth.

“We recommend BUY with an upward revised DCF-based price target of Rs 806 (13.8X FY27 EV/EBITDA), representing an upside of 54.5 percent,” said Ventura in its note to clients.

The company’s long-term outlook appears strong, with revenue and EBITDA expected to grow at a compound annual growth rate (CAGR) of 11.8 percent and 11 percent, respectively, over the FY24-27E period.

Impressive Performance in FY24 and H1 FY25

Adani Power’s operational performance has been exceptional, especially in FY24 and the first half of FY25. In FY24, the company achieved impressive year-on-year (YoY) growth in revenue and EBITDA, with a 29.9 percent increase in revenue to Rs 50,351 crore and an 81 percent surge in EBITDA to Rs 18,181 crore.

The company’s performance in H1 FY25 continued this upward trajectory, with YoY growth rates of 17.9 percent in revenue and 32.1 percent in EBITDA.

One of the key drivers behind Adani Power’s strong performance has been its improved plant load factor (PLF). The PLF increased significantly from 48 percent in FY23 to 72 percent in H1 FY25, marking its highest level in seven years.

This improvement is attributed to lower imported coal prices and better domestic coal availability, both of which have bolstered the company’s operational efficiency and profitability.

Also Read | Adani Power logs 20 pc growth in continuing revenue at Rs 28,517 cr in H1 FY25

Strategic Expansion and Future Growth

Adani Power is committed to future growth through continued investments in its thermal power capacity. The company’s target of expanding its capacity to 30.67 GW by FY31 is expected to increase its market share in India’s thermal power sector from 6 percent in FY24 to 11 percent by FY31.

This expansion will not only enhance the company’s revenue potential but also solidify its position as a leading player in the Indian energy sector.

In addition to its capacity expansion plans, Adani Power is also focusing on improving operational efficiencies and ensuring sustainable growth.

The company has continued to make significant strides in both revenue and EBITDA, driven by strong fundamentals and an operationally efficient business model.

Key Highlights of Adani Power’s Business Performance

• Installed Capacity: 17.55 GW, making Adani Power the largest private coal-based thermal power producer in India.
• Capacity Expansion: Targeting a total capacity of 30.67 GW by FY31.
• Strong Revenue Growth: FY24 revenue grew 29.9% YoY to Rs 50,351 crore.
• Improved PLF: A surge from 48% in FY23 to 72% in H1 FY25.
• EBITDA Growth: 81% YoY increase in EBITDA in FY24, totaling Rs 18,181 crore.
• Future Projections: Revenue and EBITDA are expected to grow at a CAGR of 11.8% and 11%, respectively, from FY24 to FY27.