Buy Adani Power; target of Rs 259: Prabhudas Lilladher

Key Investment Pillars

• Adani Power's strong Q2 performance was driven by an 11.5% YoY increase in power sales and a PLF of 70.1%, with the company progressing well on its thermal expansion programme.
• The company has secured long-term PPAs for approximately 62% of its upcoming 24 GW thermal capacity pipeline, improving revenue visibility.
• Adani Power is diversifying beyond thermal through hydro, nuclear, and inorganic opportunities, targeting 5 GW of hydropower capacity in Bhutan and awaiting regulatory clarity for nuclear power expansion.
• The company's total debt stood at INR 618.6 bn as of Sept 2026, with net debt remaining broadly stable at INR 458.5 bn, and management expects financing costs to remain stable through disciplined liquidity management.

Thesis Validation Checklist

• Investors should watch for the commissioning of Korba Phase II and Mahan Phase II, further PPA tie-ups, and sustained power demand to validate the investment thesis.
• The company's ability to execute its thermal expansion plans, diversify its generation mix, and manage its debt levels will be key factors in determining its long-term growth prospects.
• Regulatory clarity on nuclear power expansion and the company's ability to secure new PPAs will also be important signals to monitor.