Adani Power (ADANI IN) – Initiating Coverage – Multi-year Expansion with De-risked Growth – BUY
Published on 25 Sep 2026
We initiate coverage on Adani Power (ADANI IN) with a BUY rating, supported by a strong earnings growth trajectory as recently signed PPAs offer higher capacity charges, while thermal power remains critical for meeting India’s baseload and reliability requirements. ADANI, India’s second-largest thermal power producer, currently accounts for ~7% of India’s coal-based installed capacity and is targeting a substantial expansion in capacity from 18.3GW in FY26 to 41.9GW by FY32, increasing its market share to ~14%. The ~INR2trn expansion capex (~INR84mn/MW) is manageable, with net debt/EBITDA expected to peak at just 2.5x in FY29E, among the lowest across peers. Importantly, execution risk is relatively contained, with 100% of land and BTG equipment secured, ~60% of capacity additions planned at brownfield sites, and 56% of the expansion pipeline already tied up under long-term PPAs. We forecast 21% EBITDA CAGR over FY26–29E, driven by expected capacity additions of 1.3GW/1.6GW/4.0GW in FY27/28/29E, respectively. We value ADANI at 18x Sep’28E EBITDA, deriving a TP of INR259/share, equivalent to ~10.5x FY32E EBITDA on a 12.5% discount rate. The premium valuation is supported by stronger earnings growth, improving capital efficiency and declining leverage.
