The Adani Power share price is in focus after Morgan Stanley raised its price target to Rs 185 from Rs 163.60 per share. According to the international brokerage house, improving earnings visibility, faster PPA conversions, and disciplined capital execution are key triggers for the upgrade.
The brokerage retained its Overweight stance and the target price implies a potential upside of nearly 17% from its current levels. The international brokerage firm believes Adani Power’s EBITDA may rise by 20% annually between FY25-FY33, helped by higher plant utilisation and a stronger mix of contracted projects.
Morgan Stanley on Adani Power: The big PPA push
Additionally, Morgan Stanley said Adani Power’s recent progress in power purchase agreements (PPAs) has improved its earnings visibility. The company has signed contracts for its Bitubori (500 MW) and Pirpanti (2.4 GW) plants, and received letters of award for Raipur (570 MW) and Annupur (1.6 GW).
With these new deals, Adani Power’s total contracted and bid pipeline now stands at about 22 GW, up from 17 GW earlier. The share of uncontracted or “merchant” capacity has fallen to 7.6 GW from 9.6 GW.
These PPAs have fixed tariffs between Rs 5.8 and Rs 6.2 per unit, with capacity charges near Rs 4 per unit. The brokerage estimates that each unit sold under these contracts can earn EBITDA of about Rs 3.5, higher than the Rs 2.5 seen in merchant sales. Morgan Stanley said this shift will reduce earnings swings and make cash flows steadier.
Morgan Stanley on Adani Power: Strong finances to fund growth
Moreover, Adani Power plans to add 24 GW of new capacity, which will need about Rs 2.25 lakh crore ($27 billion) in capital spending between FY26 – FY32. Morgan Stanley said about two-thirds of this can be funded through internal cash generation.
The company’s net debt-to-EBITDA ratio is around 1.5x, much lower than peers, giving it room to borrow when needed. The brokerage called Adani Power’s balance sheet “one of the strongest among private power producers.”
Morgan Stanley raises Adani Power’s profit forecasts
The brokerage has lifted its earnings estimates after a better-than-expected second quarter and new contract wins. It now expects net profit of Rs 1,19,000 crore in FY26, rising to Rs 1,53,000 crore by FY28.
Revenue is forecast to climb from Rs 5.6 lakh crore in FY26 to Rs 7.1 lakh crore in FY28. EBITDA is expected to grow from Rs 2.2 lakh crore to Rs 3 lakh crore in the same period.
Morgan Stanley projects an EBITDA margin of about 40% by FY28 and a return on equity near 20%, supported by higher utilisation and cost control.
Morgan Stanley on Adani Power: Competitive advantages and execution record
Morgan Stanley said Adani Power’s strength lies in its project execution, location of plants near coal and port infrastructure, and ability to convert uncontracted capacity into long-term PPAs. The company’s land and logistical readiness allow faster project delivery than most peers.
Morgan Stanley on Adani Power: Risks
The brokerage warned that slower power demand, delays in plant commissioning, or disruptions in coal supply could hurt earnings. Rising receivables from state utilities are another risk if discom finances weaken.
On the other hand, quicker signing of PPAs, better merchant pricing, or faster capacity expansion could lift profits beyond current estimates.