Adani Power continues to assert its dominance in India’s thermal generation sector, riding high on operational scale-ups, improving efficiencies, and robust long-term capacity planning. ICICI Securities has reiterated its BUY recommendation on the stock, raising the target price to Rs 610 from the previous Rs 600. The revised outlook is anchored on expanding operational capacity, a significant uptick in PLF (Plant Load Factor), and an optimistic view of India’s evolving power landscape. With the company’s net generation capacity surging to 17.5GW, Adani Power is now gearing up for a massive scale-up to 31GW by FY30, setting itself up as a formidable play in the power infrastructure space.

Strong Operational Performance and Capacity Growth

Adani Power closed FY25 with an installed capacity of 17.5GW, up from 15.2GW in FY24. This expansion, driven by strategic acquisitions, catalyzed a 20% YoY rise in generation to 27 billion units (BU) for Q4FY25. The company's PLF improved by 600 basis points to 71%, while PAF remained robust at 91%.

The company is focused not just on volume but also on efficiency, with consistently high availability ensuring optimal generation utilization. The roadmap ahead includes under-construction plants totaling 12.5GW, expected to be commissioned over FY28–30, with land and equipment procurement already secured.

Revenue Momentum with Earnings Moderation

Adani Power reported Q4FY25 revenue at Rs 142 billion, marking a 7% YoY increase. However, EBITDA remained flat at Rs 48 billion, and PAT dipped 5% YoY to Rs 26 billion, primarily due to a 42% drop in other income and rising operational expenses from new acquisitions and CSR outlays.

Despite this moderation, core fundamentals remain strong. The subdued profit was a result of exceptional gains in the previous year rather than deteriorating performance.

Robust PPA Pipeline Positions Company for Growth

Adani Power is strategically positioned with an ambitious goal of 31GW capacity by FY30. Of this, PPAs have already been tied up for 3GW at competitive tariffs, and state DISCOMs are actively initiating more tenders. This positions Adani to monetize untied capacities, particularly as the Centre has allocated 24GW of coal to states for new power agreements.

The company is also leveraging its strong merchant positioning. Tariffs for FY24–25 averaged Rs 5.93/kWh, slightly lower than Rs 6.87/kWh a year prior but still elevated due to strong peak demand.

Capex Discipline and Funding Strategy

Adani Power’s FY25 capex stood at Rs 80 billion, and the company plans to invest Rs 133 billion in FY26. Notably, there is no intent to raise debt for this expansion; all funding will be through internal accruals, reflecting a conservative and sustainable financial strategy.

The company's Net Debt/EBITDA ratio has been improving, and is expected to strengthen further in FY26, a positive for investors focused on balance sheet health.

Godda Plant Driving Global Revenue

The Godda power plant, which supplies electricity to Bangladesh, is now a significant revenue contributor. For FY25, it clocked Rs 83.5 billion in revenue and Rs 48.2 billion in EBITDA, with Q4 EBITDA alone at Rs 8.3 billion. However, the plant has USD 900 million in outstanding receivables from the total USD 2 billion billed, which remains a risk area to monitor.

Valuation: DCF-Based Upside to Rs 610

ICICI Securities values Adani Power using a DCF model, with the stock currently trading at 13.7x FY27E earnings and 11.8x EV/EBITDA. The total per-share valuation is broken down as follows:

The upside potential is supported by state PPA awards and favorable pricing in merchant power markets.

Key Financial Metrics

FY25 net revenue stood at Rs 562 billion, with EBITDA at Rs 213 billion and PAT at Rs 127 billion. While PAT declined 39% YoY due to high base effects and reduced other income, forward projections are constructive:

Strategic Takeaways for Investors

1. Capacity-led Growth: Adani Power’s aggressive capacity expansion and acquisition strategy position it well for long-term revenue visibility and sectoral dominance.

2. Disciplined Capital Allocation: The choice to avoid debt for FY26 capex enhances balance sheet strength and reduces financial risk.

3. Favourable Demand-Supply Dynamics: With India’s peak demand expected to grow at 6% annually and limited new capacity coming online, Adani Power is well-placed to capitalize on pricing power.

4. Risk Watch: Investors should monitor receivables from Bangladesh and construction delays in upcoming projects.

Bottomline for Long Term Investors

Adani Power remains a compelling investment proposition amid India's resurging demand for thermal power. With a strategic blend of operational efficiency, disciplined financial management, and proactive capacity scaling, the company is building sustainable value. ICICI Securities’ revised target of Rs 610 underlines the company’s medium-term potential as India’s power sector tilts back toward conventional energy. For investors seeking exposure to India’s power story, Adani Power remains a high-conviction, growth-centric pick.