Jefferies keeps Buy on Adani Power, AESL: FY32 plan

What Jefferies said on the Adani power vertical

Jefferies has retained its ‘Buy’ rating on three Adani Group stocks: Adani Power Ltd, Adani Green Energy Ltd, and Adani Energy Solutions Ltd (AESL). Its management meet notes dated June 5, 2026 for Adani Energy Solutions and Adani Power pointed to improving execution, locked-in contracts, and stronger medium-term growth visibility. For Adani Power, Jefferies maintained a target price of Rs 255, indicating about 11% upside from the prevailing levels referenced in the note.

The brokerage’s broad argument is that India’s power demand backdrop is improving visibility for both thermal and grid infrastructure. In Adani Power’s case, Jefferies focused on multi-year capacity additions backed by power purchase agreements (PPAs). For AESL, the focus was on the scale-up of the bid pipeline and the execution of a growing portfolio of transmission projects.

Management meeting notes dated June 5, 2026

The June 5 notes highlighted “robust bid pipelines, locked-in PPAs, and improving financial metrics” as the key drivers supporting double-digit medium-term growth. Jefferies linked AESL’s transmission and smart meter execution with Adani Power’s contracted thermal expansion to argue for earnings visibility through FY30.

For investors, the key datapoints in the note were the pace of capacity additions, the share of capacity already tied up under long-term contracts, and the direction of tariffs in new PPAs. Jefferies also pointed to easing funding pressure over time, with its model expecting Adani Power to move to free cash flow positivity by FY30E.

Adani Power: Capacity roadmap to 42 GW by FY32

Jefferies said Adani Power’s management reiterated its plan to expand capacity by 2.3 times to 42 GW by FY32. It also highlighted management commentary that thermal power remains critical for meeting India’s baseload demand.

On the buildout, the brokerage noted that 23.7 GW of upcoming capacity is part of the expansion plan, and 56% of this upcoming capacity is already locked in under long-term PPAs. The stated goal is to tie up 100% of the planned capacity, which Jefferies said lowers the risk profile further.

Jefferies also cited operational progress on the base: capacity rose 33% to 18.3 GW by May 2026. In a separate capacity snapshot included in the article text, installed capacity was cited at about 18.15 GW at the end of Q4 FY26, and management’s longer-term markers were noted as 31 GW by 2030 and 42 GW by 2032.

PPAs and tariffs: New signing prices are higher

A key support for Jefferies’ view is that PPA tariffs are improving. The note referenced recent PPAs for 8 GW signed during Aug 2025 to Mar 2026 with Bihar, Madhya Pradesh, Assam, Uttarakhand and Tamil Nadu state electricity boards (SEBs) at Rs 5.8-6.3 per unit. This was compared with Rs 5.4 per unit for Raipur in Sept 2024.

Separately, Jefferies also flagged that some new thermal tariff PPAs have been signed at close to Rs 6 per unit, compared with below Rs 5.5 earlier, and said this shift could materially improve profitability visibility through FY28 to FY30.

Project execution and equipment ordering

Beyond contracts, the note called out readiness on land and equipment. Jefferies wrote that land and equipment for 42 GW were already secured from L&T and BHEL. It also stated that 6.9 GW should be operational by FY29E, which it said underpins 20% plus EBITDA growth visibility.

The article text also included a company statement that it is securing another 4.5 GW of new long-term PPAs under the SHAKTI scheme, and that it has already arranged ordering for equipment and land for the entire 23.7 GW expansion, with implementation progressing.

Jefferies financial view: EBITDA CAGR and FCF turning point

Jefferies said it expects Adani Power to deliver a 23% EBITDA CAGR over FY26-30E, and to turn free cash flow positive by FY30E from negative levels currently. In one model description cited, Jefferies linked the FCF inflection to capacity reaching 31 GW.

The brokerage also cited a Q4 EBITDA outperformance as part of the rationale for its positive stance. Q4 FY26 EBITDA was reported at Rs 6,598 crore, around 7% above Jefferies’ estimate, driven by better-than-expected realisations and higher plant load factors.

Valuation and the revised target price

Jefferies reiterated its ‘Buy’ rating on Adani Power with a target price of Rs 255 and noted it had raised the target from Rs 185. The move was described as a valuation rollover, with the brokerage lifting its multiple to 20x FY28 estimated earnings from 18x September 2027 estimates, citing rising power demand and healthy growth prospects over the next 3 to 4 years.

The article text also noted Jefferies’ comparison with NTPC, where it assigns Adani Power a 100% premium to NTPC’s implied 10x multiple, citing faster growth and some merchant upside.

Adani Energy Solutions: Rising project book and bid pipeline

For AESL, Jefferies described the company as India’s only listed private pure-play on transmission and distribution. It said AESL is executing transmission projects worth Rs 718 billion, up 20% year-on-year.

Jefferies highlighted a near-term bid pipeline of Rs 1.5 trillion, compared with Rs 540 billion at end-FY25. On profitability and returns, it said return on equity (ROE) should move toward 13% by FY30E as interest costs fall and commissioned assets add EBITDA.

Key numbers at a glance

Risks and monitorables cited by the brokerage

Jefferies flagged several risks for Adani Power, including resurfacing of past PPA disputes, a sharp drop in merchant realisations, demand disappointment, and payment delays from the 1.6 GW Godda plant that supplies power to Bangladesh under PPAs.

On the operational side, investors are likely to track the pace of PPA tie-ups for the remaining portion of the 23.7 GW pipeline, the commissioning timeline for the 6.9 GW expected by FY29E, and whether the higher PPA tariff trend holds across incremental signing activity.

Why the note matters for investors

Jefferies’ call ties together two linked parts of the power value chain: generation (Adani Power) and grid buildout and distribution-linked projects (AESL). The central claim is not just capacity growth, but the quality of visibility through PPAs for generation and the expanding bid pipeline for transmission.

For Adani Power, the emphasis is on long-term contracted additions and improving tariff realisations, which the brokerage connects to EBITDA compounding and a move to free cash flow positivity by FY30E. For AESL, the focus is on scaling execution and a bid pipeline jump to Rs 1.5 trillion, alongside improving ROE as interest costs fall.

Conclusion

Jefferies has stayed constructive on Adani Group’s power and related infrastructure plays, retaining ‘Buy’ ratings on Adani Power, Adani Green Energy and Adani Energy Solutions. Its notes point to PPA-backed capacity additions at Adani Power and a rising order and bid pipeline at AESL as the main drivers of medium-term visibility. The next set of milestones will be contract tie-ups for the remaining expansion capacity, commissioning progress toward FY29E targets, and updates on transmission project execution and bidding outcomes.