Adani Power (ADANI IN) – Q2FY27 Result Update – Strong Q2, thermal expansion on track – BUY

ADANI delivered a strong Q2 performance, with Adj. EBITDA up by 21% YoY, backed by sales volume +11% YoY and PLF reaching 70.1% (vs. 63% YoY). EBITDA growth was driven by PPA capacity, as merchant contribution to EBITDA stood lower at 15% vs 24% YoY. Capacity execution remains on track, with the first 660 MW unit of Korba Phase II achieving grid synchronization and commissioning expected shortly, followed by the second unit around December 2026. Mahan Phase II (1,600 MW) is also at an advanced stage, with commercial operations targeted for early FY28. Over mid to long term, company is targeting ~45 GW of capacity by FY32 (CAGR of 16% over FY26-32), including ~3 GW through inorganic opportunities, while exploring nuclear power and expanding the Adani Group’s Bhutan hydro portfolio to diversify its long-term growth avenues. 1HFY27 incurred capex of INR125bn and financial flexibility remains a key enabler of this growth, with net debt broadly stable at INR 458.5bn as of September 2026 (Net debt/EBITDA of 2x) , as internal accruals are expected to fund a significant portion of planned capex. We maintain BUY rating on the stock with a target price of INR 259/ share valuing at 18x Sep’28E EBITDA, Key catalysts include commissioning of Korba Phase II and Mahan Phase II, further PPA tie-ups (62% of under construction capacity is tied up), and sustained power demand.