Adani Group stock to buy now for an upside of 31%; Recommended by Morgan Stanley

Synopsis: Adani Power is in focus after Morgan Stanley stated an overweight rating on the company, highlighting 23.7 GW capacity additions, better capital efficiency, strong funding visibility, and a healthy EBITDA outlook as the key reasons for the ​‍​‌‍​‍‌​‍​‌‍​‍‌same.

The shares of this leading Adani group company, which is the largest private thermal power producer in India, are in focus after Morgan Stanley projected a strong 31 percent upside. In this article, we will go into the details of what led to this uptick

With a market capitalisation of Rs 2,76,274 crore, the shares of Adani Power Ltd closed at Rs 143.25 per share, up 1 percent from its previous day’s close of Rs 141.70 per share. Over the past five years, the stock has delivered a multibagger return of 1,398 percent, outperforming NIFTY 50’s positive return of 90 percent.

Analyst Comments

Leading global brokerage, Morgan Stanley, has maintained an “overweight” rating on Adani Power and has assigned a target price of Rs 185 per share, signalling an upside potential of 31 percent from its previous day’s closing price.

Adani​‍​‌‍​‍‌​‍​‌‍​‍‌ Power is positioned to take on the benefits of India’s growth over the long term, says Morgan Stanley. The company has been cited as one of the key beneficiaries due to their scale, efficient execution, and the addition of new capacity.

One of the main reasons for the bullishness is the fact that Adani Power has the vision of utilising all of its 23.7 GW under-construction capacity by the end of next year. Furthermore, the company aims to decrease its untied capacity from 10 percent to 3–4 percent, hence improving revenue visibility.

Besides, Morgan Stanley also recognises that the India-based company’s capital efficiency is the best in the industry, with the estimated capex of Rs 9.5–10 crore per MW, which is significantly lower than the industry’s average at Rs 15 crore per MW, resulting from the quicker execution and equipment purchasing led by the front-runner.

On the monetary side, the brokerage firm mentions that the most significant part of the total capex of Rs 2 lakh crore for the capacity expansion (23.7 MW) is funded from the internal accruals of Rs 1.4 lakh crore, while the domestic debt is only expected to contribute Rs 60,000 crore, keeping the balance sheet healthy. Moreover, the brokerage firm is expecting the company to operate highly profitable, with Morgan Stanley forecasting an EBITDA of Rs 3.7 per unit for fresh bids at present tariffs. 

Financial and Other Highlights 

Adani Power Ltd is a leading power generation company in India. It produces and sells electricity through long-term and short-term power purchase agreements, primarily using thermal energy. It operates major coal-based power plants across Gujarat, Maharashtra, Rajasthan, Karnataka, Chhattisgarh, Madhya Pradesh, and Jharkhand. 

Adani Power has reported an operating revenue of Rs 13,457 crore in Q2 FY26, representing a minor 1 percent growth compared to Rs 13,339 crore in Q2 FY25. However, on a quarter-on-quarter basis, it declined by 5 percent from Rs 14,109 crore.

Regarding its profitability, it reported a net profit of Rs 2,906 crore in Q2 FY26, a decline of 12 percent as compared to Rs 3,298 crore in Q2 FY25. Additionally, on a quarter-on-quarter basis, it declined by 12 percent from Rs 3,305 crore. 

Disclaimer

The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post Adani Group stock to buy now for an upside of 31%; Recommended by Morgan Stanley appeared first on Trade Brains.