Adani Power: Antique sees 30% upside, multi-year earnings upcycle ahead

Antique Stock Broking on Tuesday initiated coverage on Adani Power with a 'Buy' rating, saying the Adani group company is entering a multi-year earnings upcycle led by a sharp capacity expansion, strong power demand tailwinds and improving earnings visibility. The brokerage has set a target price of Rs 187, valuing the stock at 15 times estimated FY28 Ebitda. The target suggests 30 per cent potential upside ahead.

Antique said Adani Power is set to expand capacity 2.3 times, from 18.15 GW in FY25 to 41.9 GW by FY33, marking a decisive transition from a previously stressed thermal IPP to what it viewed as the most efficient private baseload power producer in India. The brokerage said India’s structural power upcycle, supported by a likely 6 per cent demand CAGR over FY22–32 and rising peak requirements from EVs, data centres, AI and manufacturing, provided a strong medium-to-long-term tailwind for coal-based generation.

It cited Adani Power’s dominance in state-led thermal power procurement, noting that the company had secured about 70 per cent of awarded capacity, or 12.4 GW out of 17.7 GW, underscoring its cost competitiveness and execution capability. Antique added that Adani Power's earnings visibility is strong, with around 90 per cent of operational capacity and 67 per cent of the expanded 41.9 GW portfolio tied up under long-term PPAs. New PPAs carries higher fixed charges, while fuel supply risks are mitigated through SHAKTI-linked fuel supply agreements, it noted. 

The brokerage said Adani Power is executing the largest private-sector thermal expansion programme in India, with 23.72 GW under construction across nine brownfield phases and four greenfield projects. Brownfield expansion, which accounted for about 60 per cent of the pipeline, compressed capital costs to around Rs 8 crore per MW and shortened execution timelines to roughly 3.5 years, compared with 5–6 years for typical public-sector projects. Antique said this strategy aligned well with India’s tightening baseload needs, with peak demand projected to rise sharply over the next decade. It also noted that captive coal production of about 14 million tonnes per annum was expected to support around 3 GW of merchant capacity and improve dispatch competitiveness.

Adani Power’s balance sheet and operating profile had undergone a meaningful turnaround over FY19–25. Regulatory resolutions, including Supreme Court and APTEL rulings on Tiroda and Kawai, had unlocked pending receivables and normalised tariff pass-through for fuel costs and change-in-law events, Antique said. 

The brokerage pointed to the acquisition of 7.3 GW of distressed assets at an average cost of around Rs 22 million per MW, well below replacement cost, which had structurally lowered capital employed per MW and enhanced returns. These assets were revived within 18–24 months, with PLFs stabilising in the 65–75 per cent range and cumulative Ebitda exceeding acquisition values, it said.

On execution risk, Antique said the expansion pipeline is largely de-risked, with land secured for all projects, boiler-turbine-generator orders placed for most units, in-house EPC capabilities providing project control and assured fuel availability for PPA-tied capacity.

Financially, Antique said it expected consolidated revenue, Ebitda and PAT to grow at a CAGR of 16 per cent, 19 per cent and 17 per cent, respectively, over FY25–32E. The brokerage added that around 60 per cent of the Rs 2,000 billion capex pipeline was likely to be funded through internal accruals, supporting steady deleveraging, with net debt to Ebitda declining to below 1x by FY32E and RoE sustaining above 15 per cent.