Adani Power shares soar 9% on resolution plan approval; check target prices

Shares of Adani Power Ltd surged during the trading session on Tuesday after a resolution plan submitted by the Adani Group firm was approved by the committee of creditors of Vidarbha Industries Power (VIPL), which is undergoing corporate insolvency resolution process under the Insolvency and Bankruptcy Code (IBC) 2016.

On the back of heavy trading volumes, shares of Adani Power surged 9.48 per cent to Rs 514.75 on Tuesday, with its total market capitalization close to Rs 2 lakh crore. The stock had settled 470.15 in the previous trading session on Monday. Despite today's recovery, the stock is down nearly 45 per cent from its 52-week highs.

In this regard, Adani Power has received a letter of intent (LOI) from the resolution professional on February 24, 2025 said the company in an exchange filing on Monday. "VIPL owns and operates a 2x300 MW (600 MW) thermal power plant located in MIDC Industrial Area, Butibori, Nagpur, Maharashtra," it added.

Adani Power reported a 7.4 per cent YoY rise in consolidated net profit at Rs 2,940.07 crore for the December 2024 quarter. The company's consolidated revenue for the quarter was up 11 per cent on-year at Rs 14,833 crore due to higher volume. Its ebitda soared 23.5 per cent YoY to Rs 6,185 crore.18, supported by higher one-time income.

Power sale volume stood at 23.3 billion units (BU) in the quarter, up 8 per cent YoY, due to improved power demand and higher operating capacity. Along with the quarterly earnings, the company board approved to raise Rs 5,000 crore via qualified institutional placement (QIP), while Rs 11,000 crore from non-convertible debentures (NCDs).

In its latest report on Adani Power, Ventura Securities said that Adani Power is India's largest private pure-play thermal power producer, and is strategically positioned with robust capacity expansion plans to address this critical demand. It remains committed to capacity expansion, targeting 30.67 GW by FY31, which is expected to increase its share in India’s thermal power market, it said.

"Power demand in India is surging, driven by rising manufacturing activities and growing adoption of white goods & gadgets in households. With RE unable to fully meet the rising energy needs, the widening peak demand-supply gap underscores the necessity of augmenting base load thermal power capacity," it added with a 'buy' with a target price of Rs 806.

Overseas brokerage firm Jefferies said that Adani Power is on its journey to raise capacity by 1.7 times from 17.6 GW to 30.7 GW by 2030. Land requirements and financing plans are in place. Close coordination with BHEL for equipment delivery and in-house EPC are ensuring capex is on schedule, it said.

"Thermal capacity in an overall peak deficit scenario with merchant exposure is positive," it said while initiating coverage with a 'buy' and a target price of Rs 660 apiece. The foreign brokerage firm sees past PPA issues returning and impacting Ebitda; lower merchant realisations; demand disappointment; and payment delays for 1.6 GW Godda power plant as key risks for the company.