Why Adani Power shares are in focus today: Targets by Bernstein, Antique

Adani Power Ltd shares are in focus on Tuesday after the Adani group firm received Letter of Intent (LoI)  for its resolution plan for GVK Energy Ltd (GVKEL) from resolution professional. The committee of creditors of GVK Energy, which was undergoing corporate insolvency resolution process under the Insolvency and Bankruptcy Code 2016 had approved the resolution plan submitted by Adani Power Ltd.

As per data compiled from Bloomberg, Bernstein's Nikhil Nigania suggested 'Outperform' on the stock with a target of Rs 220 on Tuesday. Antique Stock Broking's Ishan Verma on Monday suggested 'Buy' on the stock with a target of Rs 282. The 12-month Bloomberg consensus target for the stock at Rs 252.30 suggested 23.40 per cent potential upside for the stock.

GVK Energy owns and operates a 330 MW hydroelectric power plant located in Uttarakhand through its subsidiary Alaknanda Hydro Power Company Ltd.

Adani Power said the implementation of the resolution plan is subject to the terms of the LOI and requisite approvals from the National Company Law Tribunal, Hyderabad or any other regulatory authority, courts and tribunal, as the case may be, under applicable law

MOFSL recently initiated coverage on Adani Power with a 'Buy' rating and target of Rs 250 per share. IT likes Adani Power for ambitious growth plans, solid execution track record demonstrated by acquisition and turnaround of multiple distressed plants, and optionality from nuclear foray and limited competition in the thermal segment.

APL, is India’s largest private thermal power producer with a capacity of 18GW in Q1, accounting for 24 per cent of private and 8 per cent of aggregate coal and lignite-based capacity in India. APL sells power under long/medium-term PPAs with DISCOMs and merchant contracts.

"We see APL as the natural winner of India's upcoming thermal capacity build-out and beneficiary of a benign competitive environment. As the Central Electricity Authority (CEA)’s 86GW thermal capacity pipeline expands further, we note that APL faces limited competition as NTPC generally only participates in regulated tariff-linked projects, Tata Power has publicly stated its intent to focus away from thermal and towards renewables, and JSW Energy already has an ambitious pipeline of thermal/RE projects with a target to reach 30GW by 2030," MOFSL said.