Adani Power‘s plans to more than double generation capacity by FY32, improve power purchase agreement coverage and strengthen cash-flow generation. This has reinforced Jefferies‘ positive view on the stock following a management interaction.
The brokerage maintained its ‘Buy’ rating and target price of Rs 255, implying an upside of about 11% from the previous closing price. Jefferies said 56% of the company’s planned 23.7 gigawatts of upcoming capacity is already tied up under long-term power purchase agreements, while management aims to secure agreements for the balance capacity as well.
Adani Power: Jefferies expects steady growth
The brokerage expects Adani Power Ltd. to deliver a 23% earnings before interest, tax, depreciation and amortisation compound annual growth rate between FY26 -FY30 and turn free cash flow positive by FY30.
Jefferies said thermal power continues to play a critical role in meeting India’s baseload electricity demand and expects Adani Power’s expansion pipeline to support earnings growth over the medium term.
Power purchase agreement wins strengthen growth visibility
A key positive highlighted by Jefferies is Adani Power’s success in securing long-term power purchase agreements across multiple states.
The brokerage said the company has won 12.6 gigawatts of thermal power purchase agreements out of 19.3 gigawatts bid out over the past two years. As a result, around 95% of the company’s current operating capacity is tied to power purchase agreements compared with more than 80% at the end of FY25.
Jefferies said management reaffirmed its goal of expanding installed capacity to 42 gigawatts by FY32 from 18.3 gigawatts currently.
“Management reiterated its target of expanding capacity by 2.3x to 42 GW by FY32 and highlighted that thermal power remains critical for meeting India’s baseload demand,” Jefferies said.
The brokerage added, “56% of the upcoming 23.7 GW capacity is already locked in under long-term PPAs and the aim is to tie up 100%, which lowers the risk profile further.”
Jefferies also noted that Adani Power signed a 1.6 gigawatt agreement for its Raipur plant with Maharashtra State Electricity Board at Rs 5.4 per unit in September 2024. Between August 2025 and March 2026, the company tied up another 8 gigawatts with Bihar, Madhya Pradesh, Assam, Uttarakhand and Tamil Nadu state electricity boards at tariffs ranging from Rs 5.8 to Rs 6.3 per unit.
“Positively, incremental tie-ups are happening at better tariffs,” Jefferies said.
According to the brokerage, securing long-term agreements for future capacity improves revenue visibility and reduces earnings volatility.
Jefferies expects operating cash flows to improve
Jefferies said Adani Power’s operating cash-flow profile remains strong despite the sizeable capital expenditure programme underway.
The brokerage expects operating cash flow to grow at a compound annual rate of about 20% between FY26 and FY30, supported by favourable power purchase agreement tariffs and a healthy working-capital cycle.
“We expect strong operational cash flows to keep leverage at just 0.7x despite capex,” Jefferies said.
The brokerage added, “The company should turn FCF positive from negative levels currently by FY30E as it hits 31 GW capacity.”
According to Jefferies, net debt-to-earnings before interest, tax, depreciation and amortisation is expected to peak at 3.4 times in FY27 before declining to around 2 times by FY30.
Expansion plan backed by land and equipment availability
Jefferies said Adani Power has already secured key resources required for its long-term growth plans.
The brokerage noted that the company’s capacity increased 33% to 18.2 gigawatts in FY26 from FY23 levels. Following the acquisition of a 180-megawatt thermal asset from Jaiprakash Associates through the National Company Law Tribunal process in May 2026, total installed capacity increased to 18.3 gigawatts.
“Land requirements are in place for the 42 GW FY32 target, and equipment for the upcoming 23.7 GW is entirely ordered out,” Jefferies said.
The brokerage noted that equipment orders have been placed with Larsen & Toubro and Bharat Heavy Electricals, providing greater visibility on project execution. Jefferies also expects 6.9 gigawatts of additional capacity to become operational by FY29.
Adani Power’s earnings growth faster than NTPC’s, says Jefferies
Jefferies believes Adani Power’s growth profile compares favourably with NTPC.
The brokerage expects Adani Power’s earnings before interest, tax, depreciation and amortisation to increase 2.3 times between FY26 and FY30. In comparison, NTPC’s earnings before interest, tax, depreciation and amortisation are projected to rise 1.7 times during the same period.
“Our Rs255 PT values APL at 20x EV/EBITDA, a 100% premium to NTPC’s implied 10x multiple, given faster growth and some merchant upside also available in APL,” Jefferies said.
The brokerage said the valuation premium reflects Adani Power’s stronger growth outlook and additional merchant power opportunities.
Nuclear power emerges as a long-term opportunity
Beyond thermal generation, Jefferies highlighted management’s preparations for future opportunities in nuclear energy.
The brokerage noted that Adani Power incorporated two new subsidiaries in April 2026 to undertake nuclear power generation activities.
“Nuclear power is a potential long-term opportunity which the company is preparing for,” Jefferies said.
While the report does not assign financial estimates to the nuclear initiative, the brokerage identified it as an emerging area of strategic interest.
Conclusion
Jefferies remains positive on Adani Power’s medium-term prospects, supported by expanding generation capacity, improving power purchase agreement coverage and growing cash-flow visibility. The brokerage expects the company to benefit from sustained demand for baseload power while continuing to secure long-term agreements for upcoming projects.
According to Jefferies, the combination of a 42-gigawatt capacity target, stronger earnings growth, improving leverage metrics and the prospect of positive free cash flow by FY30 supports its constructive view on the company.
Disclaimer: The stock ratings, target prices, and earnings projections discussed in this report are based on institutional equity research from Jefferies and do not constitute direct buy, sell, or hold recommendations for retail investors. Equity investments in the power infrastructure and utilities sectors are subject to distinct risks, including execution delays, regulatory shifts in power purchase agreements, and fuel availability. Because individual financial goals and risk thresholds vary significantly, readers are strongly advised to consult a SEBI-registered investment advisor or a qualified financial consultant before making specific capital allocations or investment decisions based on these projections.
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