Investment firm JM Financial has maintained its 'Buy' rating on Adani Power, forecasting a potential 30% upside for its shares to a target price of Rs 257. This optimistic assessment follows a detailed visit to Adani Power's Raipur complex, where analysts observed robust project execution and a healthy portfolio.
Raipur Complex: A Dual-Asset Strategy
The Raipur complex is central to JM Financial's positive view. It comprises two key components: an operational 2x685 MW plant and an under-construction 2x800 MW expansion project. The brokerage highlighted three critical observations from its visit:
- Significant turnaround of the operational plant.
- Continued importance of thermal power for grid stability due to reactive power generation.
- Steady progress on the Raipur Phase II expansion, with BHEL as the primary equipment supplier.
Operational Plant's Remarkable Turnaround
The operational plant, formerly known as GMR Chhattisgarh Energy, was acquired by Adani Power in August 2019. Initially, it faced considerable challenges, including issues with coal linkages, cost escalations, funding constraints, and under-utilisation. Since its acquisition, Adani Power has overseen a substantial improvement.
The plant's availability has consistently exceeded 90%, and its plant load factor (PLF) has seen a steady rise, improving from 55% in 2021 to 73% in FY24, 78% in FY25, and 72% in FY26. Notably, the plant's EBITDA for FY26 reached Rs 2,300 crore, significantly higher than its enterprise value of Rs 3,500 crore at the time of acquisition. This facility benefits from power purchase agreements (PPAs) with MPSEZ, Chhattisgarh, and Karnataka, along with competitive energy charge rates due to advantageous coal and logistics, ensuring its priority in merit-order dispatch.
Progress on Phase II Expansion
The 2x800 MW ultra-supercritical project, Raipur Extension TPP Phase II, is advancing well, largely adhering to its schedule. BHEL serves as the main plant vendor for this expansion, which secures coal linkage from SECL mines and a water allocation of 36 MCM from the MohmelaSirpur Barrage in the Mahanadi river. Adani Power has already tied up 100% of the PPA for this project.
Construction has moved beyond the foundational stages. Main plant packages are broadly 60-70% complete, with Unit 3 showing slightly faster progress than Unit 4. Boiler execution stands at 64% for Unit 3 and 60% for Unit 4, encompassing civil, structural, and pressure-parts work. Electrostatic Precipitator (ESP) progress is at 83% for Unit 3 and 71% for Unit 4.
While Unit 3's commissioning is officially scheduled for January 2028, site executives expressed confidence in potentially bringing it online six months earlier, underscoring the swift execution capabilities observed by JM Financial.
JM Financial's visit reinforced its positive view on Adani Power, citing the turnaround of the 2x685 MW plant, the progress of the 2x800 MW expansion and the company’s execution across the site. It also said thermal generation would remain important for grid stability, while Unit 3 of Phase II remains scheduled for January 2028, with site executives indicating the possibility of commissioning six months ahead of that timeline.