Synopsis
New Delhi, Jan 24 (NationPress) Adani Power Ltd is experiencing growth spurred by improved coal availability and business expansion. Ventura brokerage has set a target price of Rs 806 for the stock over the next 24 months, reflecting a notable upside potential of 54.5 percent.Key Takeaways
- Adani Power's stock target at Rs 806.
- 54.5% upside potential identified.
- Power demand in India is increasing.
- APL's installed capacity is 17.55 GW.
- Revenue growth projected at 11.8% CAGR.
New Delhi, Jan 24 (NationPress) Increased coal supply and business growth are propelling the expansion of Adani Power Ltd, as reported by brokerage firm Ventura. They have set a target price of Rs 806 for the stock in the upcoming 24 months, indicating an impressive upside potential of 54.5 percent.
The demand for power in India is on the rise, driven by escalating manufacturing activities and a growing inclination for white goods and gadgets in homes.
Given that renewable energy is not yet sufficient to satisfy the mounting energy requirements, the widening gap between peak demand and supply highlights the urgent need to enhance base load thermal power capacity, as noted by Ventura.
As the largest private pure-play thermal power producer in India, Adani Power is strategically positioned with comprehensive capacity expansion plans to meet this pressing demand.
"We recommend a BUY with an upwardly revised DCF-based price target of Rs 806 (13.8X FY27 EV/EBITDA), indicating a potential upside of 54.5 percent," stated the brokerage.
The stock is currently trading at approximately Rs 522 per share.
With a total installed capacity of 17.55 GW, Adani Power Ltd (APL) is the leading private coal-based thermal power producer in India, sourcing coal from both domestic and international markets.
The surge in power demand, coupled with lower prices of imported coal and improved domestic coal supply, has significantly boosted APL's average plant load factor (PLF), which has increased from 48 percent in FY23 to 72 percent in H1 FY25, marking the highest level in seven years.
"This exceptional progress has surpassed our earlier estimates and strengthened the company’s revenue performance and operational profitability," Ventura observed.
In FY24, APL reported a year-on-year revenue growth of 29.9 percent to Rs 50,351 crore and an 81 percent increase in EBITDA to Rs 18,181 crore. In H1 FY25, revenue and EBITDA also recorded strong year-on-year growth rates of 17.9 percent and 32.1 percent, respectively.
Adani Power is dedicated to future growth through ongoing investments in thermal power capacity, aiming for a total of 30.67 GW by FY31. This is projected to raise the company’s share in India’s thermal power sector from 6 percent in FY24 to 11 percent by FY31.
Consequently, over the period of FY24-27E, APL's revenue and EBITDA are expected to grow at a Compound Annual Growth Rate (CAGR) of 11.8 percent and 11 percent, reaching Rs 70,284 crore and Rs 24,864 crore, respectively, according to the report.
"During H1 FY25, APL demonstrated remarkable business performance, supported by its solid fundamentals and operational capabilities," it added.
