Adani Power share price surges 14% as Morgan Stanley calls it ‘Top Pick’, sets target price at ₹818 — a 30% upside
Adani Power shares surged nearly 14% after Morgan Stanley rated it Overweight with a target of ₹818. The SEBI's dismissal of stock manipulation allegations boosted investor confidence, while Morgan Stanley predicts significant growth in capacity and profitability by FY33.
Shares of Adani Power soared nearly 14 per cent to their 52-week high of ₹719 on the BSE on Friday after Morgan Stanley initiated coverage with an ‘Overweight’ rating and set a price target of ₹818 apiece. This implies an upside potential of almost 30 per cent from Thursday’s close of ₹630. The brokerage not only reaffirmed its confidence in the company but also described it as its “Top Pick” in the utilities sector.
The stock rally was further fueled by regulatory clarity, as the Securities and Exchange Board of India (SEBI) dismissed allegations of stock manipulation linked to the Hindenburg report. The clean chit has reignited investor confidence and spurred a rally across Adani Group counters.
Morgan Stanley said Adani Power is at the centre of one of India’s most significant corporate revival stories, citing the resolution of regulatory issues and value-accretive acquisitions. The brokerage noted, “APL is a good illustration of turnaround in India’s corporate history, with resolution on most regulatory issues & multiple value-accretive acquisitions.”
Why is Morgan Stanley bullish on Adani Power stock?
According to Morgan Stanley, Adani Power is India’s largest private coal-based independent power producer (IPP) with 18.15 GW of operational capacity. The brokerage expects this to rise to 41.9 GW by FY32, lifting the company’s coal-based capacity market share from 8 per cent in FY25 to 15 per cent by FY32. It added, “APL is India’s largest independent power producer and second-largest power producer (after NTPC) with 8% share in both coal capacity & generation. We forecast its market share to reach 15% by F32e with a 41.9GW portfolio (2.5x vs F25).”
The company plans to spend around USD 22 billion on 23.7 GW of under-construction capacity, with Morgan Stanley projecting total expenditure could rise to USD 27 billion due to potential cost overruns. Importantly, the brokerage said 60–65 per cent of this capex will likely be funded through internal accruals, supported by a strong balance sheet, with FY25 net debt-to-Ebitda at 1.5x.
Morgan Stanley forecasts Adani Power’s Ebitda to triple by FY33, reaching ₹672 billion, a 17 per cent CAGR from FY25–33. Net profit is estimated at ₹117,402 million in FY26, growing to ₹153,164 million by FY28. Revenue is projected to climb from ₹550,150 million in FY26 to ₹700,569 million in FY28, with operating margins staying resilient.
The brokerage also highlighted the revival of long-term coal power purchase agreements (PPAs) under the SHAKTI policy. Adani Power has already secured 8.5 GW of PPAs, covering 36 per cent of its upcoming capacity, while 13.6 GW of its current 18.2 GW operations are tied up under PPAs.
Adani Power Q1 Results
Separately, Adani Power reported its Q1 FY26 earnings, with consolidated net profit declining 15.5 per cent year-on-year (YoY) to ₹3,305 crore from ₹3,913 crore. Revenue from operations fell 5.9 per cent YoY to ₹14,167 crore.
However, sequential performance improved, with profit rising 27.1 per cent from Q4 FY25, aided by a one-time income and steady operating margins. Consolidated Ebitda came in at ₹5,744 crore, down from ₹6,290 crore a year earlier due to weaker revenue and costs from new acquisitions, but up 12.7 per cent quarter-on-quarter.
Despite execution and regulatory risks, Morgan Stanley remains bullish, citing Adani Power’s scale, growth visibility, and strong financial footing.
Adani Power Stock Performance
The stock has lost 3 per cent in the last one year. However, it has risen 32 per cent in the last three months and 17 per cent I the last 1 month. Meanwhile, it has given multibagger returns in the long term, soaring 1,795 per cent in the past 5 years.
Currently at a 52-week high, the Adani Group stock has jumped 67 per cent from its 52-week low of ₹430.85, hit in November 2024.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.