Motilal Oswal’s initiation of coverage on Adani Power with a Buy rating and a target price of Rs 250 is, on the surface, an equity-market event. The brokerage’s case, however, rests on a larger infrastructure proposition: whether India’s next phase of electricity demand and generation capacity can support a major expansion in private thermal power while renewable, hydro and nuclear additions continue to face delays or policy constraints.
Adani Power’s operational capacity is about 18 GW, according to the brokerage report cited by Economic Times. The company plans to more than double that capacity to 42 GW by FY32 through a 23.7 GW project pipeline, with estimated investment of Rs 2 lakh crore. Motilal Oswal has valued the company at 16 times its estimated FY29 EBITDA and set a target price that implies approximately 20% upside from the report’s reference price of Rs 208.
The investment recommendation is therefore tied to the execution of a large physical infrastructure programme. It depends on new plants being completed, power purchase agreements being secured, capital expenditure being managed and electricity demand remaining strong enough to support the expanded fleet. The report identifies each of these factors, but it also shows that the expansion is not fully de-risked.
The most important distinction is between capacity that is already operating, capacity under development and capacity that has secured long-term offtake. Around 95% of Adani Power’s operational capacity is tied to power purchase agreements, according to Motilal Oswal. For upcoming capacity, the comparable figure is 56%. That leaves 44% of the future pipeline without PPAs, exposing part of the planned expansion to greater uncertainty over future revenue visibility.
Power purchase agreements are central to the economics of large generation projects because they establish the terms under which electricity will be sold over the long term. The report treats the high proportion of contracted operational capacity as a strength, while identifying the uncontracted portion of upcoming capacity as a risk. The difference illustrates how a project pipeline can be large on paper without every component having the same level of commercial certainty.
Motilal Oswal expects Adani Power’s operational capacity to reach 24.5 GW by FY29. It projects revenue to rise from Rs 66,640 crore in FY27 to Rs 90,450 crore in FY29, while EBITDA is estimated to increase from Rs 22,240 crore to Rs 35,310 crore. The brokerage expects EBITDA to grow at a compound annual rate of 21% between FY26 and FY29, compared with 9% annualised growth in adjusted profit.
Those estimates assume that the company can move from its existing base into a substantially larger operating portfolio without a proportionate deterioration in its balance sheet. Motilal Oswal projects net debt-to-EBITDA at about 2.4 times despite elevated capital expenditure. The ratio is presented as manageable within the brokerage’s investment thesis, but it also underlines the financing burden of the proposed buildout.
The report’s central sector argument is that thermal power could retain a significant role even as India adds renewable capacity. Motilal Oswal estimates that delays in renewable, hydro and nuclear additions could create demand for an additional 6.5 GW to 19.5 GW of thermal capacity. It also expects solar power’s tariff advantage over thermal generation to narrow by 15% to 20% over the next three to four years.
These projections do not mean that thermal power will replace renewables. Rather, they reflect a view that generation capacity is built through overlapping technologies and that delays in one segment can increase the short- to medium-term requirement for another. The evidence supplied in the report supports a case for continuing thermal demand, but it does not establish how long that demand will persist or how the eventual mix of generation will evolve.
This is where the Adani Power thesis intersects with the planning challenge facing India’s electricity system. A project pipeline must respond not only to total demand, but also to the timing, reliability and location of supply. The report focuses on capacity, contracted revenue and project economics. It does not provide a city-by-city account of demand, transmission constraints or the distribution-sector conditions that would determine how new generation reaches consumers.
The company’s acquisition strategy is another important part of the case. Motilal Oswal states that Adani Power has acquired distressed plants at an average cost of about Rs 3.5 crore per MW, compared with Rs 10 crore to Rs 12 crore per MW for greenfield projects. The brokerage says the Raigarh, Raipur and Mahan plants have generated cumulative EBITDA equivalent to approximately 3.1, 2.7 and 2.5 times their respective acquisition costs.
This strategy changes the economics of capacity addition. Acquiring operating or distressed assets can provide access to existing infrastructure at a lower initial cost than building entirely new plants. It can also bring operational challenges that are not visible in the acquisition price. The report’s figures demonstrate the historical earnings generated by the three named plants, but they do not establish that every future acquisition will produce similar outcomes.
Motilal Oswal believes limited private-sector competition could support project economics. That assessment is linked to the availability of distressed assets and the company’s record of turning them around. Yet the same expansion model creates a need for disciplined execution. The brokerage flags project delays, cost overruns, slower tendering and stricter environmental regulations as key risks.
The possibility of nuclear power adds another layer of uncertainty. Adani Power has outlined plans to develop 10 GW of nuclear capacity by 2035, subject to the government permitting private-sector participation. The plan is therefore an option rather than an established operating segment. Its significance lies in the company’s stated intention to participate in a technology whose institutional and regulatory framework is still decisive to private-sector entry.
The company has also indicated scope for another 3 GW of capacity through organic expansion or acquisitions. Motilal Oswal estimates that EBITDA could reach about Rs 80,000 crore once the current expansion cycle is complete. That figure represents the potential scale of the business if the pipeline is executed, but the source material does not provide a detailed project-by-project schedule, financing plan or approval status for the entire portfolio.
The market response described in the report was comparatively modest. Adani Power shares traded at Rs 211 on the National Stock Exchange on Thursday, up Rs 3.43, or nearly 2%, from the previous close of Rs 207.70. The shares had declined 2.58% over the preceding week, underperforming the benchmark index’s 1.71% fall. Trading volume was 1.03 crore shares and the company’s market capitalisation was reported at Rs 4.05 lakh crore.
These figures describe investor trading around the coverage initiation, but they do not independently validate the brokerage’s operating forecasts. The target price and projected earnings remain Motilal Oswal’s assessment. Economic Times’ report does not include a separate response from Adani Power, an electricity regulator, a government ministry or a competing analyst in the supplied material.
The broader urban question is how India will secure dependable electricity while its generation mix, regulatory institutions and infrastructure requirements change. Power plants are not isolated corporate assets. Their construction affects land, transmission systems, industrial activity and public-sector procurement, while their output underpins housing, transport, commercial development and municipal services. The supplied evidence shows that private capacity expansion is being positioned as part of that wider requirement.
It also shows why capacity announcements must be read alongside contracts and execution milestones. Adani Power has a stated ambition to reach 42 GW by FY32, but only 56% of upcoming capacity is reported to have PPAs. Nuclear plans depend on government permission, while thermal expansion faces risks from delays, costs, tendering and environmental regulation. The distance between planned capacity and dependable, contracted, commissioned capacity remains the central issue.
Motilal Oswal’s coverage makes a case for Adani Power based on expansion, distressed-asset performance and the possibility of sustained thermal demand. The evidence confirms a large pipeline and strong historical performance from selected acquired plants, but it also identifies material conditions that must be met before the full growth case is realised. Future PPAs, project commissioning, capital expenditure, regulatory approvals and the company’s progress on any nuclear proposal are the milestones that will determine whether the projected expansion becomes operating infrastructure.
