Buy Adani Power; target of Rs 187: ICICI Securities

ICICI Securities's research report on Adani Power

Adani Power (Adani) has increased its under construction capacity by 2x (25GW vs earlier 12GW). It has tied up power purchase agreement of ~11GW (including L1 in Assam of 2.4GW) at attractive tariffs. Further, it is ahead of its peers as it has already placed BTG orders for entire under construction portfolio. We expect a significant part of the remainder portfolio to be tied up under long-term PPA in next 12-18 months. During the quarter, company sold 24 BU of power (+7% YoY). The merchant realization was lower by 9% in the quarter compared to last year. It reported PLF of 63% (-410bps YoY). As a result, it reported revenue of INR 134bn (+1% YoY), EBITDA at INR 50bn (-2% YoY) – in line with our estimates. We maintain BUY with a revised TP of INR 187 (to account for increased pipeline and better pricing environment)

Outlook

Maintain BUY with a revised TP of INR 187 (earlier INR 134). We believe new PPAs are being signed at attractive rates along with strong bidding pipeline.