Adani Power share price target: 30% upside likely on healthy portfolio, execution, says JM

JM Financial has retained its 'Buy' rating on Adani Power with a target price of Rs 257, saying the stock could offer 30 per cent upside following a visit to the company’s Raipur complex. The brokerage said its positive view was based on Adani Power’s healthy portfolio of projects and swift execution, and reiterated its investment case on the stock.

The Raipur site included a 2x685 MW operational plant and a 2x800 MW project under construction. JM Financial said the visit underlined three key points. They are the turnaround in the operational plant, the continued importance of thermal power for grid stability because of inherent reactive power generation, and steady progress at Raipur Phase II, where BHEL is the equipment supplier.

According to the brokerage, Unit 3 of the expansion is scheduled for commissioning in January 2028 as per the CEA, though site executives said they were confident of commissioning it six months earlier.

The operational plant, earlier known as GMR Chhattisgarh Energy, was built with technology support from Doosan, with Unit 1 and Unit 2 entering operation in June 2015 and April 2016, respectively. JM Financial said the plant later faced issues related to coal linkages, cost escalation, funding constraints and under-utilisation before Adani Power acquired the asset in August 2019.

Since the acquisition, the brokerage said the plant’s availability has remained consistently above 90 per cent, while plant load factor improved from 55 per cent in 2021 to 73 per cent, 78 per cent and 72 per cent in FY24, FY25 and FY26, respectively.

It said Ebitda for FY26 stood at Rs 2300 crore against an enterprise value of Rs 3,500 crore at the time of acquisition. The plant has power purchase agreement tie-ups with MPSEZ, Chhattisgarh and Karnataka. JM Financial also said the Raipur plant benefits from a relatively low energy charge rate because of its coal and logistics advantages, which helps it get scheduled earlier under the merit-order dispatch mechanism.

At the time of the visit, the Adani Power's plant was running in the mid-to-high 80 per cent range, unlike some thermal units that have to back down during hours of high solar generation.

On the under-construction 2x800 MW ultra-supercritical project, JM Financial said BHEL is the main plant vendor, the project has coal linkage from SECL mines, and it has water allocation of 36 MCM from the MohmelaSirpur Barrage in the Mahanadi river.

Adani Power has tied up 100 per cent PPA for the project. The brokerage said Raipur Extension TPP Phase II is progressing well and is mostly in line with schedule, with the project having moved beyond the foundation and initial construction stage.

JM Financial said the main plant packages are broadly 60-70 per cent complete, with Unit 3 generally ahead of Unit 4. Boiler execution stands at 64 per cent and 60 per cent for Unit 3 and Unit 4 across civil, structural and pressure-parts work, while ESP progress is 83 per cent and 71 per cent, respectively.

JM Financial said its Raipur visit reinforced its positive view on Adani Power, citing the turnaround of the 2x685 MW plant, the progress of the 2x800 MW expansion and the company’s execution across the site. It also said thermal generation would remain important for grid stability, while Unit 3 of Phase II remains scheduled for January 2028, with site executives indicating the possibility of commissioning six months ahead of that timeline.