Adani Group stock to buy: Why analysts see 40% upside in Adani Power post Q3 results

Adani Power shares target price: Brokerage firms continue to remain positive on Adani Power Ltd even after a mixed set of numbers in the December 2025 quarter. According to the analysts, Adani Group stock's near-term performance remained soft due to lower power demand, weaker merchant prices and subdued generation, leading to revenue and Ebitda misses.

However, the outlook is supported by strong progress on long-term power purchase agreements, a healthy tender pipeline, and planned capacity additions. Coal cost moderation and rising contracted capacity are expected to aid earnings visibility over the medium term, they say, but still expect a 40 per cent upside in the counter.

Adani Power reported 18.9 per cent year-on-year (YoY) fall in the net profit at Rs 2,479 crore, while revenue from operations declined 8.9 per cent to Rs 12,451 crore for the December 2025 quarter. Ebitda came in 15.6 per cent lower YoY to Rs 4,238 crore, while margins contracted nearly 300 bps to 34 per cent.

Adani Power added a new long-term power purchase agreement worth 3.2 GW from Assam Discom during the quarter ended December 31, 2025. 90 per cent of its existing capacity is now tied up in Power Purchase Agreements (PPAs). Consolidated power sale volume of 23.6 billion units was higher than the 23.3 billion units during the same quarter last year.

"Adani Power has signed PPAs for 12GW at attractive tariffs, taking its total under construction capacity with PPA to 12GW. State discoms are in the process of floating PPAs for capacity of 15GW. As a result, new tenders from state discoms to improve the outlook of the untied capacity. We believe new PPAs are signed at attractive rates along with a strong pipeline," said ICICI Securities.

Operationally, generation remained subdued during the quarter at 23.6 BU (flat QoQ), on the back of lower power demand. Moreover, coal prices declined 15 per cent YoY and merchant realisation was lower by 5 per cent YoY. It reported a PLF of 63 per cent. As a result, it reported revenue and Ebitda below estimates, it added but maintained 'buy' with a target price of Rs 187.

Overseas brokerage firm Morgan Stanley remains positive on Adani Powers even as revenue, ebitda and PAT were a miss from its estimates It sees operational performance largely in line and adjusted PAT was beat on lower interest and tax.  Merchant and short-term volumes declined 8 per cent YoY.

Net debt of the company rose to Rs 38,700 crore, while net debt/Ebitda increased 1.86 times. Adani Power has received letter of acceptances (LoAs) for 3,200 MW and large capacity addition in planned over FY26-29," it added and maintained 'overweight' rating with a target price of Rs 185 apiece.

Adani Power reported revenue degrowth driven by lower merchant prices and the fall in international coal prices. Ebitda margins contracted, due to higher other expenses on account of recent acquisitions, adjustment of new labour code and an additional transmission levy of Rs 130 crore, as per CERC’s true-up tariff order for Mundra TPP, said JM Financial.

"PAT was additionally impacted by lower other income. With key enablers in place and management’s assurance of timely commissioning of projects, we expect operational capacity to reach 39.5 GW by FY32 and EBITDA/MW to increase from Rs 1.3 crore/MW in FY25 to Rs 1.8 crore n/MW by FY32. We maintain a 'buy' rating on the stock with target of Rs 177, " it adds.