Motilal Oswal has initiated coverage on Adani Power with a 'buy' rating and target price of ₹250 per share, indicating an upside of 20% from the report's reference price of ₹207. According to reports from CNBC TV18, Business Standard, The Economic Times, and Moneycontrol, the brokerage chose to initiate coverage due to the company's ambitious growth plans, solid execution track record, and optionality from nuclear foray. The stock gained 2% on Thursday, rising to ₹211 on the NSE, with shares having risen 41% so far in 2026. As per The Economic Times, the brokerage valued the company at 16 times its estimated FY29 EBITDA, with investments adding ₹1 per share to the target price calculation.
Adani Power is India's largest private thermal power producer with a capacity of 18 GW in the first quarter of FY27, accounting for 24% of private and 8% of aggregate coal and lignite-based capacity in India. As reported by CNBC TV18, Business Standard, The Economic Times, and Moneycontrol, the company sells power under long/medium-term power purchase agreements (PPAs) with DISCOMs, with 95% of its operational capacity tied up, as well as through merchant contracts. The brokerage noted that Adani Power currently trades at an estimated FY29 enterprise value (EV)/EBITDA of 13.8x. Operational capacity is expected to reach 24.5 GW by FY29, with net debt-to-EBITDA projected to remain at around 2.4 times despite elevated capital expenditure.
Motilal Oswal projects an EBITDA compound annual growth rate (CAGR) of 21% estimated over FY29, along with a profit after tax (PAT) CAGR of 9% over FY26-29. According to the brokerage's analysis reported by CNBC TV18, Business Standard, The Economic Times, and Moneycontrol, capacity additions are planned at 1.3 GW, 1.6 GW and 3.2 GW in FY27, FY28 and FY29, respectively. The company has ambitious growth plans to increase capacity by 2.3 times to 42 GW by FY32. The brokerage estimates that EBITDA could reach around ₹80,000 crore once the current expansion cycle is complete. The company has a track record of turning around distressed assets, with its Raigarh, Raipur and Mahan plants generating cumulative EBITDA equivalent to about 3.1, 2.7 and 2.5 times their respective acquisition costs.
Motilal Oswal highlighted three key reasons for their bullish stance on Adani Power. First, the brokerage sees the company as the natural winner of India's upcoming thermal capacity build-out, with India's substantial thermal capacity set to rise by 86 GW over FY26-36. The Central Electricity Authority (CEA) projects coal and lignite capacity to increase by around 86GW between FY26 and FY36, from about 229GW to 315GW, with resource adequacy plans of top five power-consuming states pointing to 32.6GW of incremental thermal capacity compared with just 14.2GW implied by the national plan. Second, the company's solid execution track record includes acquiring distressed thermal assets at steep discounts, with acquired capacity coming at an average cost of around ₹35 million/MW compared with approximately ₹100 million/MW for upcoming greenfield capacity. Third, the nuclear power foray provides emerging optionality with plans to develop 10 GW of nuclear capacity by 2035, though this depends on government rules for private participation. The brokerage also noted the limited competition in the thermal segment as a key advantage, as NTPC generally participates only in regulated tariff-linked projects and Tata Power has stated intent to focus away from thermal towards renewables.
On Thursday, Adani Power shares were trading at ₹211 on the NSE, up ₹3.43 or nearly 2% from their previous close of ₹207.70. However, as reported by The Economic Times, the stock declined 2.58% over the past week, underperforming the benchmark index's 1.71% fall. Trading volume stood at 1.03 crore shares during the session, while the company's market capitalisation was ₹4.05 lakh crore. The brokerage flagged that 44% of the upcoming capacity remains without PPAs as a key risk factor. Other risks include project delays, cost overruns, slower tendering, stricter environmental regulations, and competition in the power sector. The bear case scenario assumes a 15% lower merchant realization/unit and 5% lower plant load factor in the Mundra plant. For FY27, FY28 and FY29, MOFSL estimates revenue at ₹66,640 crore, ₹77,140 crore and ₹90,450 crore respectively, with EBITDA projected at ₹22,240 crore, ₹27,870 crore and ₹35,310 crore. EBITDA margins are expected to improve from 33.4% in FY27 to 39% in FY29.
