IIFL Capital has initiated coverage with a “buy” recommendation on Adani Power with a price target of ₹240 per share, indicating an upside of 9% from its previous close.
The brokerage said it likes Adani Power’s strategy of capturing cyclical arbitrage in asset creation, which earns outsized returns in a structural ‘utility’ sector. It said the company’s willingness to take anti-consensus, counter-cyclical bets has translated into the stock delivering the best returns in this segment.
IIFL Capital said Adani Power’s growth pipeline is larger than NTPC, adding that the company is building 23.7 GW of new coal capacity, which is more than NTPC’s pipeline of 17 GW.
This will more than double its estimated 18 GW operating base, the brokerage said. It expects Adani Power’s free cash flow from operations to rise from ₹17,000 crore in FY26 to ₹57,000 crore on a full portfolio buildout, with optionality from planned moves into nuclear and hydro as well.
Additionally, the brokerage expects Adani Power to expand its customer base beyond DISCOMs, foraying into firm power supply to commercial and industrial (C&I) customers.
With a large growth pipeline, industry-leading execution and complementary group renewables and energy-management businesses, IIFL Capital estimates the company can quadruple its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) by financial year 2033-2035.
IIFL Capital expects Adani Power’s EBITDA to grow at a Compound Annual Growth Rate (CAGR) of 20% over financial year 2026-2029, as some under-construction projects commission, making it among the fastest-growing non-renewable power generation companies in India.
Its sum-of-the-parts-based 12-month price target of ₹240 per share values Adani Power at an implied EV/EBITDA of 20x estimated for financial year 2028, above the coverage median of 11.1x, reflecting its faster growth and superior profitability, it said.
The downside risks include — execution delays, failure to sign PPAs, weak spot tariffs, and competition from battery storage.
While 60% of the brokerage’s fair value rests on unexecuted projects and the stock trades at a rich 4.6x FY28 estimated price-to-book-value, it thinks the company’s industry-leading asset base and cash flow profile justify the growth opportunity.
Of the 10 analysts who have coverage on the Adani Power stock, eight have a “buy” rating and one each have “hold” and “sell” ratings.
Shares of Adani Power are trading 0.9% lower on Tuesday at ₹217.87. The stock has risen 47% so far this year.
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