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Adani Power
Our verdict on Adani Power isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
The company has significantly accelerated its PPA tie-ups, reducing merchant capacity to 5% as of Q4 FY26, nearly reaching the long-term target of 3-4% much earlier than the 6-7 year timeline. (1 exceeded, 1 missed across 2 tracked commitments)
“For the balance period, we are expecting an average realization of around l Rs. 6 or so, which used to be the rate over the last few years.”
The company is currently participating in ongoing thermal PPA bids for over 13 GW of capacity. (2 in progress across 2 tracked commitments)
“We are looking at ongoing bids of 15 gigawatts to fill up the balance 12 gigawatt capacity.”
The company reported a consolidated O&M availability of 89% for the full year FY26, falling slightly short of the >90% target. (1 missed, 1 met across 2 tracked commitments)
“But for the full year, we should be ending with more than 90% overall plant availability anyway”
Setting up a 570-megawatt hydro power plant in Bhutan via an SPV. — target: 570-megawatt (+1 more commitment)
“We are expecting that it will get connected by December 2025.”
Target to increase total power generation capacity to 41,870 MW by FY32. — target: 41,870 MW (+1 more commitment)
“Operating Capacity 18,150 MW + Locked-in Capacity (2) 23,720 MW = Target Capacity 41,870 MW”
See the full cited Management analysis of Adani Power
How durable is the business?
While primarily India-focused, the company has signaled a geographic shift by incorporating a project in Bhutan, marking its first major move beyond Indian territory. (1 expanding)
“We are expanding our area of focus beyond the Indian territory... We have recently incorporated an SPV in Bhutan setting up a 570-megawatt hydro power plant.”
The company is aggressively expanding its scale, having acquired Vidarbha Industries Power (600 MW) and progressing on 4,800 MW of capacity expansion out of a 12,520 MW target by 2030. (5 expanding)
“Power Demand in key States (BU)* ... Haryana, Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Karnataka, Tamil Nadu”
The company resolved a major receivable concern by receiving over $500 million from the Bangladesh Power Development Board, normalizing outstanding dues. (1 expanding)
“we have also received more than US $500 million payment from the Bangladesh Power Development Board towards their outstanding dues... the outstanding receivables position has now been brought to near normal level”
The company is aggressively expanding its PPA-tied capacity, having won 9 GW of new long-term bids and increasing the portfolio tie-up from 88% to approximately 91% to reduce merchant volatility. (4 expanding, 1 contracting)
“These PPAs provide availability-based fixed charges, offering stable per-megawatt EBITDA... As you may be aware, the fuel cost is pass-through for the PPAs.”
The company is successfully reducing merchant exposure by tying up more capacity in long-term contracts. Contracted sales volume share increased from 80% to 82% year-over-year for the quarter. (1 expanding, 1 stable)
“63% Near-pithead Fuel cost advantage... 87% of domestic coal-based capacity has fuel security in form of long-term FSAs”
See the full cited Business Model analysis of Adani Power
Where does growth come from?
Immediate capacity growth is on track with Korba Phase-II (1.32 GW) and Mahan Phase 2 nearing completion for commissioning in the next fiscal year. (1 steady across 1 signal, 1 leading indicator)
“Adani Infra India Ltd. has nominated APL as an “implementation agency” to implement the Resolution Plan for acquiring certain power assets and investments from Jaiprakash Associates Ltd.”
Adani Power is maintaining high operational efficiency, with its plants available to produce power over 90% of the time, which is a key driver for earning fixed capacity charges. — O&M Availability: +200bps YoY (+1 more signal)
“Ensuring consistent high plant availability through predictive and preventive maintenance; Q4FY26 O&M Availability: 93%”
The company is shifting toward a self-funded, debt-light growth model. It repaid Rs. 2,579 crores of promoter debt (UPS) in Q1 and expects internal accruals (FFO) to exceed Rs. 1 lakh crore over the next five years to fund CAPEX. (1 steady, 1 accelerating, 2 new trend across 4 signals)
“So, Bharat Bhai, we should be in a position to achieve INR50,000 crore conservatively by FY 2031.”
The company is expanding its geographic footprint beyond India, starting with a new hydro power project in Bhutan.
“We are expanding our area of focus beyond the Indian territory... We have recently incorporated an SPV in Bhutan setting up a 570-megawatt hydro power plant.”
Adani Power is aggressively bidding for new long-term power supply contracts (PPAs), which provide steady, predictable income for decades.
“Ongoing Thermal PPA Bids 13+ GW”
See the full cited Future Growth analysis of Adani Power
What could break the thesis?
PLF for Q2 FY26 was 62.8%, down from 66.9% in Q2 FY25. H1 FY26 PLF also showed a decline to 64.8% from 72.3% YoY, primarily due to weather-related demand slowdown. (3 intensifying, 2 stable)
“Generation Performance (PLF %) ... 71% FY25 ... 67% FY26”
While FY26 saw tepid demand growth (0.8%), management reports a 'good revival' starting in March 2026 with peak demand reaching 256 GW, suggesting the demand slowdown risk is beginning to subside. (1 easing, 4 stable)
“Prolonged monsoons and cooler temperatures in FY26 resulted in subdued power demand, affecting power offtake under PPAs and average rates in the merchant market.”
Management reports that the four projects currently under construction (6,120 MW) are now 'ahead of the time' in terms of delivery and execution, suggesting previous delay concerns are being resolved. (1 easing)
“But because of this geopolitical issue, we are taking a conservative approach because certain things, as I said earlier, the issue of availability of workforce, there are issues of availability of certain critical resources like LPG, et cetera... we are only deferring the commissioning targets by an average of 6 months.”
Execution risk regarding clearances is intensifying as the project pipeline has grown. While land and equipment are 92-100% secured, environmental clearances are only at 38% for the total organic expansion pipeline of 23.7 GW. (1 intensifying, 1 easing)
“Organic Total 23,720 MW ... Environmental Clearance 38% ... Brownfield development model: Faster clearances and permissions”
Risk is easing as the company secured environmental clearance for the Korba Phase-II expansion (1,320 MW) and has already locked in equipment supplies for 11.2 GW of new capacity. (1 easing, 3 stable)
“We have also received environmental clearance for the Korba Phase-II expansion revival, which will add 1,320 MW capacity upon completion.”
See the full cited Risk analysis of Adani Power
Read the full thesis on Adani Power
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