Adani Power vs NTPC? Which is a better bet? 7 factors that investors should watch

That is a notable change from previous years when merchant power prices and fuel dynamics dominated the conversation. Adani Power is steadily reducing exposure to merchant markets by locking in long-term contracts, while NTPC is building a larger regulated asset base alongside aggressive renewable and storage expansion. The common thread is that both companies are positioning themselves for a period in which earnings visibility increasingly comes from assets under operation rather than favourable pricing cycles.

#1: Adani Power vs NTPC: Capacity expansion has become the main earnings driver

The clearest takeaway from both earnings calls is that future profit growth is increasingly linked to commissioned capacity rather than margin expansion.

Adani Power ended FY26 with an operating capacity of 18,330 megawatts and has already locked in 23,720 megawatts of additional capacity, taking its planned portfolio to 42,050 megawatts. The company has tied up 13.3 gigawatts of expansion capacity under long-term power purchase agreements and expects commissioning activity to accelerate over the next few years. Revenue remained largely stable at Rs 57,865 crore in FY26 compared with Rs 58,906 crore in FY25, while profit after tax increased to Rs 12,971 crore from Rs 12,750 crore during the same period.

SB Khyalia, Chief Executive Officer of Adani Power, said, “Our upcoming capacity commissioning will drive the next phase of EBITDA and cash flow growth. We expect significant earnings growth in the years to come. These new PPAs are highly earnings-accretive, which will generate significant cash flows in the coming years.”

NTPC is pursuing an even larger build-out. Group installed capacity increased to 89,108 megawatts as of March 31, 2026 from 79,930 megawatts a year earlier after adding 9,618 megawatts during FY26, the highest annual addition in the company’s history. NTPC Group currently has more than 34 gigawatts under construction, including 16.5 gigawatts of coal-based capacity, about 2.6 gigawatts of hydro capacity and 15 gigawatts of renewable energy capacity.

Jaikumar Srinivasan, Director (Finance) at NTPC, said, “NTPC Group currently has over 34 GW of capacity under construction, comprising 16.5 GW of coal-based capacity, about 2.6 GW of hydro capacity and 15 GW of renewable energy capacity providing a strong foundation for near- to medium-term growth.”

#2: Adani Power vs NTPC: Long-term PPAs are replacing merchant market dependence

The Adani Power management commentary offered one of the strongest signals about how thermal generators are approaching the next few years.

The company disclosed that 95% of its operating capacity is now tied up under long-term and medium-term power purchase agreements. During FY26, it secured 10.4 gigawatts of expansion capacity under long-term PPAs, taking total tied-up expansion capacity to 13.3 gigawatts. Management repeatedly stressed that contracted capacity provides earnings visibility and protection against volatility in merchant tariffs.

Khyalia said, “We have ensured revenue visibility for our current operations with 95% of our operating capacity now tied up under long-term and medium-term PPA. This strategy provides stability and derisks our business from short-term market volatility.”

He also acknowledged the growing influence of renewable energy on merchant prices, saying, “We feel, we are of the view that when more and more renewables will get added, the prices of merchant are bound to go down. So that is the risk which we are trying to mitigate by signing the more and more.”

NTPC operates under a different model because much of its earnings come through regulated returns. However, the underlying objective remains similar. The company continues to expand regulated assets that provide predictable cash flows and lower earnings volatility. As of March 31, 2026, NTPC’s consolidated regulated equity increased to Rs 1.20 lakh crore from Rs 1.09 lakh crore a year earlier.

#3: Adani Power vs NTPC: Dividend policy remains a key differentiator

The two companies continue to offer very different shareholder return profiles.

NTPC maintained its position as a consistent dividend payer. The board recommended a final dividend of Rs 3.50 per share for FY26. Together with interim dividends of Rs 5.50 per share already paid, total FY26 dividend stood at Rs 9 per share.

Srinivasan said, “Total dividend for the FY26 will be INR9 per share, in line with the company’s commitment to delivering value to its shareholders.”

The dividend declaration came alongside strong earnings growth. NTPC’s standalone profit after tax increased to Rs 23,162 crore in FY26 from Rs 19,649 crore in FY25, while consolidated profit after tax rose to Rs 27,546 crore from Rs 23,953 crore.

Adani Power presents a different proposition. The company continues to direct cash generation towards expansion. During FY26, it incurred about Rs 22,000 crore of expansion capital expenditure and management guided capex of around Rs 25,000 crore in FY27 and about Rs 33,000 crore in FY28. Rather than emphasising dividend distribution, management focused on funding future projects and increasing contracted generation capacity.

The distinction is important because NTPC offers a combination of growth and cash returns, whereas Adani Power remains primarily a capacity-expansion story.

#4: Adani Power vs NTPC: Demand recovery is strengthening the outlook

Both management teams sounded notably more optimistic about electricity demand than they did during much of FY26.

Adani Power generated 105 billion units during FY26 despite industry demand growth of only 0.8%. Management attributed the weaker demand environment to an extended monsoon and cooler weather conditions. However, the company said demand started recovering from March and expects stronger growth during FY27.

Khyalia said, “We have started to see a good revival in power demand from March as warmer weather has arrived. Peak demand has recently reached 256 gigawatts, and it is expected to rise further in the current year. We believe that FY27 will see a strong growth in overall power demand as well as peak demand.”

NTPC echoed that view. The company pointed to record electricity demand levels and suggested that electrification trends are likely to support long-term growth.

Srinivasan said, “We have been witnessing a sharp increase in power demand since the last quarter, and the trend has further accelerated during the current quarter.” He added, “The country has witnessed record peak demand of 271 GW and day generation of 6,268 million units recorded on 21st May 2026.”

Both companies therefore enter FY27 with expectations of stronger demand than they experienced during most of FY26.

#5: Adani Power vs NTPC: Margin expansion is no longer the central theme

One of the most striking aspects of both earnings calls was what management teams did not focus on.

Adani Power reported FY26 EBITDA of Rs 23,431 crore compared with Rs 24,008 crore in FY25, while EBITDA margin moderated to 40% from 41%. Despite that, management spent most of the discussion talking about contracted capacity, future commissioning and long-term PPAs rather than margin expansion.

Chief Financial Officer Dilip Jha said, “FY26 was marked by weather-induced demand volatility, lower peak temperatures and increased renewable generation. As a result, merchant prices remain subdued for most of the year.”

NTPC’s discussion followed a similar pattern. The company concentrated on regulated equity growth, storage opportunities, renewable additions, nuclear projects and capacity expansion. Standalone regulated equity increased to Rs 94,631 crore as of March 31, 2026 from Rs 90,902 crore a year earlier.

The common message is that future earnings growth is increasingly tied to assets, contracts and execution rather than higher merchant power realisations.

#6: Adani Power vs NTPC: New investment areas are expanding beyond thermal power

Another major takeaway from the management commentary is the widening scope of future investments.

Adani Power disclosed that it has incorporated a special purpose vehicle in Bhutan for a 570-megawatt hydroelectric project. The company is also evaluating opportunities in hydro power, transmission and nuclear energy. Management confirmed that several special purpose vehicles have been incorporated for future nuclear investments and that site identification work is underway.

Khyalia said, “We are also aligning ourselves to the emerging long-term opportunities in the power sector, such as nuclear power. We have incorporated several SPVs in India for investment in nuclear power projects.”

NTPC is pursuing an even broader strategy. The company is expanding battery energy storage systems, pumped storage projects, green hydrogen, green methanol, sustainable aviation fuel, coal gasification and nuclear power.

Srinivasan said, “Nuclear energy will remain an important pillar of our growth strategy through projects being developed under ASHVINI as well as other standalone opportunities.”

The takeaway is that both companies increasingly view themselves as diversified energy infrastructure operators rather than pure thermal generators.

#7: Adani Power vs NTPC: Brokerages endorse India’s power demand story but differ on valuations

Brokerage commentary following the earnings season broadly aligned with what management teams communicated during their post-results interactions. Analysts remained constructive on India’s long-term power demand outlook, supported by capacity additions, industrial expansion, data centre investments and rising electricity consumption. However, views diverged on valuation, particularly in the case of Adani Power after its sharp rally over the past year.

Morgan Stanley retained its ‘Overweight’ rating on Adani Power and continued to classify the company among its preferred utility picks. The brokerage noted that Adani Power delivered a 117% return over the previous 12 months, outperforming the MSCI India Index by 108 percentage points. 

Not all brokerages were equally bullish on Adani Power. JM Financial downgraded the stock to ‘Reduce’ from ‘Buy’ and raised its target price to Rs 202 from Rs 177. The brokerage said Adani Power’s Q4 FY26 performance exceeded expectations, with revenue rising to Rs 14,560 crore from Rs 14,145 crore in Q4 FY25 and EBITDA margin improving to 34.8% from 33.4% during the same period. 

Brokerages covering NTPC struck a more uniformly positive tone. Nuvama Institutional Equities retained a ‘Buy’ rating and target price of Rs 445, identifying NTPC as its preferred power-sector pick because of regulated equity growth, renewable expansion and earnings visibility. JM Financial maintained a ‘Buy’ rating with a target price of Rs 450, citing record capacity additions, growing regulated equity and the company’s expanding presence across renewables, pumped storage and nuclear power. 

Axis Securities also reiterated a ‘Buy’ rating with a target price of Rs 430, pointing to NTPC’s 34.2 GW under-construction pipeline, annual renewable addition targets of around 8 GW and a group capital expenditure plan of nearly Rs 6.2 lakh crore through FY32.

Motilal Oswal Financial Services took a more measured approach, maintaining a ‘Neutral’ rating with a target price of Rs 393. The brokerage said NTPC’s renewable energy execution, expanding capacity base and regulated equity growth remain key positives, but it also pointed to moderation in thermal plant load factors and lower thermal capacity addition targets compared with earlier guidance.

Conclusion

If the post-earnings commentary from both companies is any indication, India’s power story is entering a new phase. The focus is shifting away from short-term tariff gains and towards long-term capacity creation, contracted revenues and energy infrastructure expansion. 

Whether through Adani Power’s aggressive PPA-led growth strategy or NTPC’s regulated-return model backed by renewables and storage, both companies are positioning for a future powered by rising electricity demand. T

he real test now is execution, and the winners could be the companies that translate ambitious capacity plans into reliable cash flows over the next decade.

Disclaimer: The stock investment insights, target prices, and sectoral growth expectations discussed in this broker-led strategy note are based on institutional equity research reports from Jefferies and do not constitute direct buy, sell, or hold recommendations for retail investors.

Equities across consumer staples, heavy manufacturing/railways, and the aviation sector are subject to distinct structural headwinds. Packaged food and FMCG companies are heavily exposed to global agricultural commodity and energy price fluctuations that dictate input margins. Railway engineering and capital goods firms depend heavily on long-term government infrastructure capex allocations, contract execution speeds, and supply-chain dependencies. Meanwhile, commercial aviation companies operate under thin margins highly sensitive to foreign exchange volatility, crude oil pricing cycles, and fleet utilization constraints. Because individual risk tolerance and asset distribution targets differ significantly, readers are strongly advised to consult a SEBI-registered investment advisor or a qualified financial consultant before deploying fresh capital based on these target estimates.

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