Adani Power share price increases 14% as Morgan Stanley calls it 'top pick'; Set the target price at £ 818, a 30% upside down

Shares of Adani Power rose nearly 14 percent to its peak of 52 weeks of £ 719 on the BSE on Friday after Morgan Stanley started covering with an overweight rating and set a price target of £ 818 per piece. This implies an upside potential of almost 30 percent from Thursday’s closure of £ 630. The broker not only confirmed his confidence in the business but also described it as the ‘top choice’ in the utility sector. The stock rally was further fueled by the clarity of regulations, as the Securities and Exchange Board of India (Sebi) dismissed the allegations of equity manipulation linked to the Hindenburg report. The Clean Chit revived investor confidence and spurred a rally over Adani group banks. Morgan Stanley said Adani Power is the center of one of India’s most important stories for corporate revival, referring to solving regulatory issues and value of value. The broker noted: “APL is a good illustration of the turnaround in the corporate history of India, with resolution over most regulatory issues and multiple value-acclaimed acquisitions.” Why is Morgan Stanley Bullish on the share According to Morgan Stanley, Adani Power is India’s largest private coal -based independent power producer (IPP) with 18.15 GW operational capacity. The broker expects it to rise by FY32 to 41.9 GW, and increase the company’s market -based capacity market share of 8 percent in FY25 to 15 percent with FY32. He added: “APL is the largest independent power producer of India and the second largest power producer (after NTPC) with a 8% share in both coal capacity and generation. We predict that the market share will reach 15% with F32E with a 41.9 GW portfolio (2.5x vs F25).” The company plans to spend about $ 22 billion on $ 27.7 GW, with Morgan Stanley predicting total expenses, up to $ 27 billion could rise due to possible cost overrun. What matters, the broker said that 60-65 percent of this Capeex is likely to be funded by a strong balance sheet, with FY25 net debt-to-ebitda at 1.5x. Morgan Stanley predicts that the Ebitda of Adani Power has tripled with FY33 and reached £ 672 billion, a 17 percent CAGR of FY25–33. The net profit is estimated at £ 117,402m in FY26, which grows up to £ 153.164m with FY28. Revenue is expected to climb from £ 550,150m in FY26 to £ 700,569m in FY28, with operating margins remaining resilient. The broker also emphasized the revival of long-term purchase purchasing agreements (PPAs) under Shakti policy. Adani Power has already acquired 8.5 GW PPAs, covering 36 percent of its upcoming capacity, while 13.6 GW of its current 18.2 GW operations are tied under PPAs. Adani Power, Adani Power Q1 results, reported separately that its Q1 FY26 earnings, with a consolidated net profit that drops 15.5 percent on an annual £ 3,305 crore. Operation revenue fell 5.9 percent to £ 14,167 crore. However, successive achievements have improved, with the profit rising 27.1 percent from the first quarter of the first quarter of FY25, aided by a one -time income and steady operating margins. Consolidated Ebitda was a £ 5.744 crore, lower than £ 6,290 crore a year earlier due to weaker turnover and costs from new acquisitions, but with 12.7 percent quarter-to-quarter. Despite the execution and regulatory risks, Morgan Stanley still remains bullish, citing Adani Power’s scope, growth and strong financial foot. Adani Power Stock Performance The stock has lost 3 percent over the past 1 year. However, it has risen by 32 percent over the past 3 months and 17 percent I over the past 1 month. Meanwhile, it has yielded yields on the multiple returns in the long run, with 1.795 percent in the last five years. The Adani Group shares have risen high at 52 weeks from the 52-week low of £ 430.85, in November 2024. Disclaimer: The views and recommendations above are those of individual analysts or brokerage companies, and not of Mint. We advise investors to check with certified experts before making investment decisions.