Choice Institutional Equities has downgraded PSP Projects to a 'Reduce' rating with a target price of ₹720 per share in its research report dated January 31, 2026. According to the brokerage firm's analysis, while the entry of Adani Group's entity as a promoter shareholder provides better order book visibility, the structure of the SPA & Open Offer deal is expected to result in margin compression ahead.
The brokerage highlighted that PSPPL management has indicated business from the Adani Group will be executed on a cost-plus basis. As reported by Choice Institutional Equities, this structure implies that Adani Group, known as a cost champion, would strive to secure the best deal for their shareholders, potentially creating pressure on PSPPL's margins. The firm noted that this business model structure automatically trades off lucrative upside optionality for downside protection, making the stock behave more like a fixed income instrument.
Choice Institutional Equities has taken a conservative view on management guidance based on recent performance. According to the brokerage's analysis, using a DCF model with a 10-year forecast and 2% terminal growth, they estimate the target price of ₹720 per share. The firm maintains that their core investment thesis on PSPPL remains unchanged, with the entry of Adani Infra as a promoter shareholder providing better order book visibility despite the margin compression concerns.
