Adani Power has outlined an ambitious capacity expansion roadmap, targeting 41.9 GW by FY32 from its current position as India's largest private sector thermal power producer with 18.1 GW capacity. The expansion comes amid projections of India's peak power demand reaching over 700 GW by 2047, highlighting the continued importance of thermal power in the country's energy mix.

Current Capacity and Growth Strategy

The company's existing capacity comprises both organic and inorganic growth components:

Adani Power has demonstrated strong execution capabilities, including the synchronisation of 4,620 MW at Mundra within 36 months and strategic pre-ordering of critical power equipment. The company has secured key enablers for its expansion including land, environmental clearances, power purchase agreements, and equipment.

Financial Projections and Investment Plan

The expansion will require substantial capital investment, with analysts projecting significant financial metrics evolution:

The massive capital expenditure of ₹2 lakh crore over the FY25-32 period will temporarily impact the company's debt metrics. Net debt-to-EBITDA ratio is expected to rise from the current 1.6x in FY25 to 3.0x by FY29, before moderating back to 1.6x by FY31 as new capacity becomes operational and generates cash flows.

Operating Performance Metrics

Adani Power maintains superior operating metrics that support its expansion plans:

• Plant Load Factor (PLF): 71%
• Plant Availability Factor (PAF): 91%
• Current Market Position: India's largest private sector thermal power producer

Analyst Coverage and Valuation

Analysts have initiated coverage on Adani Power with a Buy rating, setting a target price of ₹178 against the current market price of ₹148.15. The valuation is based on 13x FY28 EV/EBITDA multiple, considering the expected improvement in EBITDA per MW metrics. This target price implies a 3.4x price-to-book ratio for FY28.

Risk Factors

Several key risks have been identified for the expansion plan:

• Execution challenges and capital intensity of the expansion program
• Corporate governance and regulatory oversight concerns
• Merchant power market exposure and pricing volatility
• Counterparty risks and legal challenges
• Thermal power concentration amid regulatory transition toward renewable energy

The company's expansion strategy reflects confidence in thermal power's continued role in India's energy security, despite the global shift toward renewable energy sources.

Adani Power shares climbed 7.1% on Thursday, reaching ₹153.20 on the BSE, as investors assessed the company's long-term growth prospects amid rising baseload power demand expectations and improving earnings visibility highlighted in recent brokerage reports.

Antique Initiates Coverage with Multi-Year Growth Outlook

Antique Stock Broking initiated coverage on Adani Power, describing the company as entering a "multi-year earnings upcycle." The brokerage highlighted the company's transformation from a stressed thermal independent power producer to India's most efficient private baseload operator.

Antique pointed to India's structural power demand upcycle, driven by electric vehicles, data centers, artificial intelligence workloads, and manufacturing growth. The brokerage noted this environment continues to support coal-based generation's role in meeting peak and non-solar demand.

Strong PPA Performance Enhances Revenue Visibility

Adani Power has demonstrated exceptional performance in securing power purchase agreements, winning a dominant share of state-led thermal PPA awards.

Antique emphasized that new PPAs carry higher fixed charges than legacy contracts, improving fixed-cost recovery and earnings predictability. The company's fuel security is supported by SHAKTI-linked fuel supply agreements, while captive coal output is expected to support merchant capacity.

Morgan Stanley Raises Price Target on Strong Earnings Visibility

Morgan Stanley updated its outlook on Adani Power, raising the price target to ₹185 from ₹163.60 while maintaining its Overweight rating. The brokerage noted the company has won PPAs and letters of award for approximately 6.7 GW over the past three months, bringing the total PPA bid pipeline to around 22 GW.

Morgan Stanley lowered its estimate of merchant capacity exposure, reflecting stronger earnings visibility from recent PPA wins and operational performance improvements.

Massive Expansion Pipeline Supports Growth Strategy

Adani Power is executing India's largest private-sector thermal expansion program, with significant capacity under construction.

Antique highlighted the company's brownfield-led expansion strategy, which reduces capital intensity and execution timelines compared to public-sector peers. Approximately 60% of the capex pipeline is expected to be funded through internal accruals, supporting deleveraging efforts.

Both brokerages emphasized that coal-fired generation is expected to remain central to India's grid stability and peak-hour reliability over the coming decade, positioning Adani Power as a key beneficiary of tightening baseload requirements.