By ANI | New Delhi | 7 July 2026
Adani Power’s long-term earnings potential, industry-leading execution capabilities and rapidly expanding cash flow profile position it as one of India’s most compelling conventional power generation stories, according to a report by IIFL Capital.
The brokerage believes the market is underappreciating the company’s ability to create value through disciplined capital allocation, counter-cyclical investments and a large expansion pipeline that is expected to more than double its operating capacity
over the coming years.
Image Credit: ANI
Adani Power is India’s largest private thermal power producer with an operational capacity of 18.2 GW and a 23.7 GW under-construction pipeline. According to IIFL, this growth pipeline, supported by complementary renewable and energy management businesses within the group, could significantly strengthen the company’s earnings trajectory over the next decade.
A key pillar of the investment case is the company’s strategy of acquiring stressed thermal assets at deeply discounted valuations. IIFL noted that Adani assembled a 7.3 GW portfolio at an average acquisition cost of around ₹42 million per MW, significantly below the roughly ₹100 million per MW required for greenfield projects. The report states, “Counter-cyclical calls drive segment-leading returns,” highlighting that these acquisitions now generate industry-leading returns.
The brokerage also highlighted Adani Power’s early procurement strategy for boiler-turbine-generator (BTG) equipment. By placing orders ahead of the industry capex cycle, the company locked in project costs roughly 20 per cent below peers, lowering capital costs while improving expected project returns and execution certainty.
On the financial front, IIFL expects Adani Power to deliver around 20 per cent EBITDA CAGR between FY26 and FY29, with EBITDA margins expanding from 36 per cent to over 42 per cent as new projects become operational. The report says, “We forecast a c.20% Ebitda Cagr over FY26- 29E,” making it one of the fastest-growing conventional power generators in India.
Revenue visibility remains strong, with nearly 96 per cent of the existing to long-term power purchase agreements (PPAs), while more than half of the upcoming capacity has already secured PPAs. According to the brokerage, this provides predictable cash flows while preserving some upside from merchant power markets.
IIFL expects free cash flow to increase sharply from around Rs 170 billion to nearly Rs billion after the expansion pipeline is commissioned, creating financial flexibility for future investments in nuclear power, hydro projects and commercial and industrial power supply.
The report also argues that thermal power will remain indispensable to India’s electricity system through at least FY35 despite rapid renewable additions. It notes that renewable intermittency, rising evening peak demand and the relatively high cost of battery storage will continue to support coal-based generation. As the report puts it, “Coal stays structurally sticky for baseload,” reflecting its view that affordable largescale energy storage remains some distance away.
While acknowledging that Adani Power trades at a premium to sector valuation multiples, IIFL argues the premium is supported by the company’s superior growth prospects, execution track record, profitability and long runway for capacity expansion.
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