Adani Power targets: IIFL sees ₹240, FY28 valuation

Why Adani Power is back on brokerage radars

IIFL Capital has initiated coverage on Adani Power with a Buy rating and a 12-month target price of ₹240, implying up to 9% upside from the referenced levels in the note. The call comes at a time when several brokerages have stayed positive on the stock, even as some highlighted a mixed performance in the December 2025 quarter. Analysts have broadly focused on the company’s capacity buildout pipeline, progress on long-term power purchase agreements (PPAs), and the implications for medium-term earnings visibility.

Recent trading action also reflected this renewed attention. Adani Power shares rose as much as 7.1% to ₹153.20 on the BSE on a Thursday session cited in the report, as investors weighed long-term growth expectations around baseload demand and capacity additions.

IIFL Capital’s thesis: pipeline, execution and optionality

In its initiating note, IIFL Capital said Adani Power has a “large growth pipeline” and “industry leading execution,” alongside complementary group businesses in renewables and energy management. On that basis, it estimates Adani can quadruple EBITDA by FY33-35E. The brokerage also flagged that a substantial part of its fair value is linked to projects that are not yet executed.

IIFL Capital noted that 60%+ of its fair value rests on unexecuted projects and that the stock trades at a relatively high 4.6x FY28E P/BV. Even so, it argued the company’s asset base and cash-flow profile justify what it called “growth optionality,” given the scale and the expected pace of commissioning.

On cash generation, IIFL Capital expects free cash flow from operations to rise from ₹170 billion in FY26 to ₹570 billion once the full portfolio is built out. It also pointed to additional optionality from planned moves into nuclear (10 GW capacity target by 2035) and hydro (a 5 GW JV with Druk Green Power, Bhutan).

Customer mix and commissioning-led growth in the next phase

A key operational angle in the IIFL note is customer diversification. The brokerage expects Adani to expand beyond supplying distribution companies (DISCOMs) and move into firm power supply to C&I (commercial and industrial) customers.

It also forecast a 20% EBITDA CAGR over FY26-29E, linked to commissioning of under-construction projects. That growth expectation is a central reason the brokerage believes Adani Power could rank among the faster-growing non-renewable power generators in India during that window.

Valuation framework and downside risks highlighted by IIFL

IIFL Capital’s ₹240 per share target is described as TP-based and implies FY28E EV/EBITDA of 20x. The note explicitly compares this to a coverage median of 11.1x, attributing the premium to faster growth and superior profitability.

The brokerage also laid out clear downside risks: execution delays, inability to sign PPAs, weak spot tariffs, and competition from battery storage. These risks matter because they directly affect commissioning timelines, contracted revenue visibility, and the merchant-realisation profile that can swing quarterly performance.

Street consensus: ratings, targets and trading range

Beyond IIFL Capital, the article cites an overall consensus view that remains tilted towards positive recommendations. The consensus rating is “Buy”, based on 8 analysts, with 6 Buy, 1 Hold, and 1 Sell.

The average 12-month price target is ₹242.25, implying +10.19% upside, with a high estimate of ₹275 and a low estimate of ₹202. The stock’s 52-week range is cited as ₹110.45 to ₹254.20, providing context for how targets compare with recent volatility.

Other brokerage views: PPAs, tender pipeline and capacity buildout

Brokerage commentary in the article indicates that near-term performance was soft for some analysts due to lower power demand, weaker merchant prices and subdued generation, which contributed to revenue and EBITDA misses in the December 2025 quarter. Even so, the broader outlook referenced rests on progress on long-term PPAs, a healthy tender pipeline, and planned capacity additions.

ICICI Securities, as quoted, said it believes new PPAs are being signed at attractive rates and referred to a strong pipeline, while maintaining a Buy with a target price of ₹187. Another cited view maintained an Overweight rating with a target price of ₹185 and highlighted letters of acceptance (LoAs) for 3,200 MW and planned capacity addition over FY26-29.

Capacity expansion detail: Antique and Morgan Stanley snapshots

Antique Stock Broking maintained its Buy rating and retained a ₹187 target price, citing long-term expansion and improving PPA coverage. Antique said execution momentum remains strong with 23.7 GW (also cited as 23.72 GW) under construction, taking total capacity to 41.9 GW by FY33E. It also stated brownfield-led expansion could mean capex of about ₹8 crore per MW and execution timelines of about 3.5 years, with phased commissioning expected to begin from FY27.

On tender outcomes, Antique said Adani Power has reinforced its position in thermal bidding, citing 12.3 GW out of 19.3 GW awarded so far in one section, and elsewhere citing 12.4 GW out of 17.7 GW awarded so far, described as around a 70% share. It also said merchant exposure could fall to 3% to 4% over the next six to seven years as more capacity is tied up under PPAs.

Morgan Stanley, separately cited, said Adani Power has won PPAs and letters of award for about 6.7 GW over the past three months, taking the PPA bid pipeline to around 22 GW. It reiterated an Overweight rating and raised its price target to ₹185 from ₹163.6, while also forecasting an EBITDA CAGR of 20% over FY25-33.

Key numbers at a glance

Financial and operating datapoints cited by Ventura and JM Financial

Ventura’s note (cited via IANS) set a 24-month target price of ₹806, implying 54.5% upside, and referenced the stock trading around ₹522 at the time. It attributed the improvement to coal availability and business expansion, and also cited plant load factor improvement from 48% in FY23 to 72% in H1 FY25.

Ventura also provided FY24 financial figures: revenue rose 29.9% YoY to ₹5,035.1 billion (₹50,351 crore), while EBITDA rose 81% YoY to ₹1,818.1 billion (₹18,181 crore). It added that in H1 FY25, revenue and EBITDA grew 17.9% YoY and 32.1% YoY, respectively. It cited a target of 30.67 GW capacity by FY31 and projected the company’s share in India’s thermal power sector rising from 6% in FY24 to 11% by FY31. Over FY24-27E, Ventura expects revenue and EBITDA to reach ₹7,028.4 billion and ₹2,486.4 billion (₹70,284 crore and ₹24,864 crore).

JM Financial initiated coverage with a Buy and a target price of ₹178, implying 22.8% upside from an approximate market price of ₹145. It expects EBITDA per MW to rise from ₹13 million/MW in FY25 to ₹18 million/MW by FY32. JM Financial also expects net debt/EBITDA to rise from 1.6x in FY25 to 3.0x by FY29 due to incremental debt for capex of ₹2,000 billion (₹2 trillion) over FY25-32, before moderating back to 1.6x by FY31 as capacity comes online.

Market impact and what investors are tracking

Across reports cited, the market debate is less about whether capacity will rise and more about execution pace, PPA coverage, and merchant exposure over time. Brokerages repeatedly linked medium-term earnings visibility to higher contracted capacity, moderation in coal costs, and fixed-charge structures in newer PPAs.

At the same time, valuation references in IIFL Capital’s initiation, including the 20x FY28E EV/EBITDA implied by its target versus an 11.1x median, show the market is pricing in a higher growth and profitability profile. The listed downside risks point to the same focal points: commissioning timelines, ability to lock in PPAs, and the sensitivity of spot tariffs.

Conclusion

IIFL Capital’s initiation with a ₹240 target adds to a broader set of mostly positive brokerage views on Adani Power that lean on capacity expansion and rising contracted visibility. The next set of milestones implied in these notes will be progress on commissioning schedules, incremental PPA signings, and how quickly merchant exposure reduces as new projects come online.