Elara initiates coverage on Adani Power, sees up to 17% upside as expansion plans gather pace

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Adani Power currently operates 18.3 GW of capacity and has another 24 GW in the pipeline. If the plans go through, its total capacity could reach around 42 GW by FY32. The scale of this expansion is central to Elara’s positive view, but the pace of execution will matter as the company takes on more capital expenditure.

Adani Power’s 42 GW ambition rests on expansion pipeline

Thermal power is expected to remain relevant as India’s electricity demand grows and renewable energy generation fluctuates. Elara points to India’s plan to add around 80 GW of coal-based capacity by FY32 as a sign of the demand outlook for thermal power.

Adani Power’s expansion plans also offer some revenue visibility. Around 60% of its 24 GW pipeline involves brownfield projects, while 13.3 GW of the upcoming capacity is backed by long-term power purchase agreements (PPAs), according to the report.

Elara expects revenue to rise to Rs 82,254 crore by FY29. EBITDA is projected to grow at a compound annual growth rate of 19% between FY26 and FY29, reaching Rs 33,091 crore. The brokerage projects profit after tax to reach Rs 15,678 crore by FY29.

Valuation leaves less room for error

Adani Power’s experience in acquiring and turning around stressed thermal power assets could provide another avenue for growth. However, Elara’s target price suggests that the opportunity is not without limits at the current valuation.

The brokerage has valued the company at 12 times its estimated FY29 EV/EBITDA. This makes execution important: delays in commissioning new capacity, volatile coal prices and fluctuations in merchant power prices could affect the earnings outlook. Rising debt as capital expenditure picks up is another risk flagged in the report.

The brokerage suggests the expansion pipeline gives Adani Power a clear path to becoming a much larger power producer. But with a significant part of the growth story already reflected in the stock, delivering on its capacity plans and managing the cost of expansion will be key to sustaining the brokerage’s positive view.