Adani Power Ltd. was listed on the NSE and BSE on August 20, 2009. In the last 5 years, the company has given a massive return of around 700% to its investors. Will Adani Power continue to provide such great returns in the future as well? Let’s explore Adani Power future growth potential and Adani Power share price target from 2025 to 2050 in this article
About Adani Power
Adani Power Limited is a company that produces electricity and is part of the Adani Group. It was started in 1996 and is one of the biggest private power companies in India. The company runs power plants in states like Gujarat, Maharashtra, Rajasthan, Karnataka, and Chhattisgarh. Most of its electricity comes from coal, but it is also working on renewable energy. Adani Power helps provide electricity to many parts of India, supporting the country’s energy needs.
Adani Power Business Model
- Selling Electricity: Adani Power makes money by producing electricity and selling it to government and private companies.
- Fixed Contracts (PPAs): It signs long-term deals with state governments and businesses to provide electricity at a fixed price, ensuring regular income.
- Selling in Open Market: When electricity demand is high, Adani Power sells extra electricity in the market at higher prices.
- Renewable Energy: The company is also making money by producing solar and wind energy.
- Coal Business: Adani Power owns coal mines and also imports coal, which helps it reduce costs and earn more profit.
- Selling to Other Countries: It supplies electricity to countries like Bangladesh and earns money from these international deals.
Adani Power Fundamental Analysis
| Stock Name | Adani Power Ltd. |
|---|---|
| Market Cap | ₹ 1,86,946 Cr. |
| 52W High | ₹ 897 |
| 52W Low | ₹ 431 |
| Stock P/E | 14.5 |
| Book Value | ₹ 14.5 |
| Dividend Yield | 0 % |
| ROCE | 32.2 % |
| ROE | 57.1% |
| Face Value | ₹ 10.0 |
| Shareholders | March 2023 | March 2024 | Dec 2024 |
|---|---|---|---|
| Promoters | 74.97% | 71.75% | 74.96% |
| FIIs | 11.70% | 15.91% | 12.34% |
| DIIs | 0.01% | 1.41% | 1.60% |
| Public | 13.32% | 10.93% | 11.09% |
| No. of Shareholders | 17,90,675 | 14,26,249 | 18,85,684 |
Key Factors Driving Adani Power Future Growth
- More Need for Electricity: As India’s population and industries grow, more electricity is needed. Adani Power can provide this power and grow.
- Building More Power Plants: Adani Power is setting up new power plants and making old ones bigger to produce more electricity. Recent acquisitions, like Essar Power’s Mahan project, have strengthened its generation capacity.
- Using Solar and Wind Energy: Adani Power is investing in clean energy like solar and wind, which will help it grow as India moves towards greener energy.
- Strong Financial Support: Adani Power is part of the big Adani Group, which gives it strong financial backing to invest in new projects.
- Growing Cities and Industries: As India builds more roads, factories, and smart cities, the demand for electricity will increase, helping Adani Power grow.
Pros of Investing in Adani Power
- Strong Market Presence: Adani Power Ltd. is India’s second-largest thermal power generation company, after NTPC.
- Part of a Strong Group: As a member of the Adani Group, Adani Power benefits from the group’s extensive experience and resources in the energy sector, providing a solid foundation for growth.
- High ROE: The company achieved a high Return on Equity (ROE) of 57.1% in FY24, indicating effective use of shareholders’ funds to generate profits.
- Strong Profit Growth: Adani Power has delivered a good profit growth of 88.5% CAGR over the last 5 years.
- Improved Profit Margins: Adani Power’s operating profit margin increased to 38.4% in FY24 from 26% in FY23, reflecting better cost management and operational efficiency.
- Reduced Payment Delays: The company’s debtor days improved from 106 to 84.6 days, meaning it collects payments faster, enhancing cash flow.
Cons of Investing in Adani Power
- High Debt: Adani Power has a lot of debt, with a debt-to-equity ratio of 0.67%. This means it has borrowed a lot of money, which can be risky if earnings go down.
- Recent Profit Drop: In the third quarter of FY25, Adani Power’s profit (EBITDA) fell by 5.4% to ₹47.86 billion, and revenue dropped by 3.4% to ₹126.92 billion due to lower electricity demand.
- Problems with Foreign Contracts: Bangladesh has asked Adani Power to fully restore power supply after facing payment issues and technical problems. Such issues can affect business outside India.
- Legal Issues: Adani Power has faced allegations of bribery to secure contracts, which could harm its reputation and affect investors’ trust.
- Decrease in FIIs Holding: FIIs have decreased their holding from 15.91% in March 2024 to 12.34% in December 2024, which shakes investor confidence.
| Years | Target Price |
|---|---|
| Adani Power Share Price Target 2025 | ₹700 to ₹850 |
| Adani Power Share Price Target 2026 | ₹890 to ₹1100 |
| Adani Power Share Price Target 2027 | ₹1070 to ₹1450 |
| Adani Power Share Price Target 2028 | ₹1280 to ₹1850 |
| Adani Power Share Price Target 2029 | ₹1550 to ₹2450 |
| Adani Power Share Price Target 2030 | ₹1850 to ₹3200 |
| Adani Power Share Price Target 2035 | ₹4000 to ₹9000 |
| Adani Power Share Price Target 2040 | ₹10000 to ₹25000 |
| Adani Power Share Price Target 2050 | ₹50000 to ₹2,50,000 |
Conclusion
Adani Power is one of India’s biggest power companies, generating electricity from coal and renewable sources. It has grown a lot in recent years, with strong profit growth and support from the Adani Group. The company benefits from long-term contracts and government support, making it a stable player in the power sector. However, it also has risks like high debt, legal issues, and stock price fluctuations. While Adani Power has good growth potential, investors should carefully consider these risks before investing. For latest updates, visit Adani Power official website.
Disclaimer
This article is for educational purposes only. It is not a stock recommendation and should not be treated as such. Please ask your financial advisor before making any investment decision.
Also Read: NTPC Share Price Target 2025 to 2050