Brokerage firm Prabhudas Lilladher has initiated coverage on Adani Power with a 'Buy' rating and a target price of Rs 259. The report highlights the company's ambitious plan to reach 41.9GW capacity by FY32. Investors may track how the firm manages its Rs 2 trillion capital spending and secures long-term power purchase agreements in the competitive utility sector.
Prabhudas Lilladher has started tracking Adani Power, issuing a 'Buy' rating with a price target of Rs 259. The firm’s research points to the company’s aggressive growth strategy in the thermal power sector. This comes as the company prepares to scale its operations to 41.9GW of capacity by the fiscal year 2032, a significant increase from its 18.3GW capacity in fiscal year 2026.
A core part of this expansion involves spending roughly Rs 2 trillion on new projects. Because this is a substantial amount of capital, investors usually watch how such high spending impacts debt levels. The brokerage expects the company’s net debt-to-EBITDA ratio—a measure of debt compared to core operating profit—to peak at about 2.5x by fiscal year 2029. This projection suggests that the company aims to maintain financial balance even while adding significant capacity.
The brokerage notes that about 60% of the new capacity is based on brownfield development, which refers to expanding existing plant sites rather than building new ones from scratch. This approach can be more efficient in terms of land acquisition and regulatory approvals. Furthermore, 56% of the expansion pipeline is already secured with long-term power purchase agreements. These contracts are important for investors as they provide revenue stability by locking in capacity charges, which helps in forecasting future earnings.
Like many companies in the power utility sector, Adani Power faces operational and financial risks that investors should consider. These include potential delays in project execution, cost increases, and the need for timely regulatory and land approvals. The company also operates in a sector where demand depends on economic activity, and it competes with other major players such as NTPC, Tata Power, and JSW Energy. Whether the company can deliver on its growth targets without taking on excessive debt will be a key point for shareholders to watch.
Looking ahead, market observers will likely monitor the company’s progress in signing power purchase agreements for the remaining capacity and any updates on project commissioning timelines. These developments will be central to determining if the company stays on the growth trajectory outlined in the brokerage report.