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Ventura is bullish on Adani Power shares, believing the company will benefit from more coal and business growth. Adani Power plans to increase its capacity to 30.67 GW by FY31
Ventura has set a target price of Rs 806 for this stock over the next 24 months. (Representative/Shutterstock)
Brokerage firm Ventura has expressed optimism regarding an Adani Group stock, projecting significant growth over the next two years.
This positive outlook is driven by the increasing availability of coal and the company’s business expansion plans. The demand for electricity in India is experiencing rapid growth, fuelled by expanding manufacturing activities and the increasing use of electronic devices in households. Ventura believes that Adani Power is well-positioned to capitalise on this surge in electricity demand.
According to Ventura’s note, renewable energy sources are currently unable to fully meet the increasing energy requirements. This necessitates an increase in baseload thermal power capacity to address the peak demand-supply gap. Adani Power, India’s largest private thermal power producer, is well-positioned to meet this significant demand with its robust capacity expansion plans.
Ventura has set a target price of Rs 806 for Adani Power over the next 24 months, indicating an upside potential of 54 per cent over the current price. As of January 24, Adani Power shares are trading at Rs 520 on NSE. With an installed capacity of 17.55 GW, Adani Power Limited (APL) is India’s largest private coal-based thermal power producer. The company sources coal from domestic and international markets. Rising power demand, low imported coal prices and improved availability of domestic coal have significantly improved APL’s average plant load factor (PLF), from 48 per cent in FY23 to 72 per cent in H1 FY25, the highest level in the last seven years.
“This remarkable progress has exceeded our previous estimates and strengthened the company’s revenue performance and operating profitability,” Ventura noted.
In FY24, APL recorded a 29.9 per cent annual growth in revenue and EBITDA to Rs 50,351 crore and 81 per cent to Rs 18,181 crore. Similarly, in H1 FY25, revenue and EBITDA recorded strong annual growth rates of 17.9 per cent and 32.1 per cent, respectively.
Adani Power is committed to future growth through continued investments in thermal power capacity, aiming to reach a total capacity of 30.67 GW by FY31. This will increase the company’s share in India’s thermal power sector from 6 per cent in FY24 to 11 per cent by FY31.
According to Ventura’s note, during FY24-27E, APL’s revenue and EBITDA are expected to grow at a compound annual growth rate (CAGR) of 11.8 per cent and 11 per cent to Rs 70,284 crore and Rs 24,864 crore, respectively. In the first half of FY25, APL has demonstrated remarkable business performance due to its strong fundamentals and independent operating capabilities.
(Disclaimer: The stocks mentioned in this article are based on the advice of brokerage houses. If you are considering investing in any of these, it is essential to consult with a certified investment advisor before doing so. News18 will not be held responsible for any financial gains or losses you may experience.)
