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The market expects much less from Adani Power than it has delivered before.
At today’s share price, buyers are assuming Adani Power grows about 10% a year, forever. Over the last ten years it actually grew about 17% a year. That is a big step down from its own record. Either the market can see a problem that the published accounts do not show yet, or it is expecting a slowdown that has not happened.
- How it is valued: Discounted cash flow.
- What the price assumes: 10% growth, against 17% the model takes from its own record.
- Ten-year record: Between FY2018 and FY2026, Adani Power's revenue went from ₹20,611 crore to ₹54,241 crore — it compounded at about 13% a year over 8 years.
- Biggest swing factor: Plant load factor. Main risk: Energy transition.
01India's largest private thermal power producer
Adani Power runs coal-fired power stations across several states, including Mundra in Gujarat, Tiroda in Maharashtra, Kawai in Rajasthan and Udupi in Karnataka, plus the Godda plant in Jharkhand, which sends its power to Bangladesh. A good part of its growth came from buying stressed power plants out of insolvency and turning them round.
Most of its output is sold to state electricity distributors under long-term contracts, with the rest sold on short-term and merchant markets at prices that move with demand. Fuel is the biggest cost, so the price of imported and domestic coal — and how much of it the contracts let Adani Power pass on — drives profit.
02What the market is assuming
Work backwards from today's share price and you can see what buyers are quietly taking for granted. Here is the growth that price implies for Adani Power, next to what the model assumes from the company's own record.
The further apart these two numbers are, the bigger the bet a buyer at today's price is making.
03Adani Power's record, in plain numbers
Between FY2018 and FY2026, Adani Power's revenue went from ₹20,611 crore to ₹54,241 crore — it compounded at about 13% a year over 8 years. It reported a net loss in FY2018, FY2019 and FY2020, and closed the period with net profit of ₹12,971 crore. In FY2026 it kept 23.9% of revenue as net profit — against a low of -10.3% in FY2018 and a high of 41.4% in FY2024. Revenue slipped 3.5% in the latest year, well behind its own long-run pace.
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
Revenue and net profit by year (₹ crore)
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2018 | 20,611 | -2,119 | -10.3% |
| FY2019 | 23,884 | -984 | -4.1% |
| FY2020 | 26,468 | -2,275 | -8.6% |
| FY2021 | 26,221 | 1,270 | 4.8% |
| FY2022 | 27,711 | 4,912 | 17.7% |
| FY2023 | 38,773 | 10,727 | 27.7% |
| FY2024 | 50,351 | 20,829 | 41.4% |
| FY2025 | 56,203 | 12,750 | 22.7% |
| FY2026 | 54,241 | 12,971 | 23.9% |
04How Adani Power gets valued — and why
Discounted cash flowThis business is valued on the cash it is expected to generate, discounted back at its cost of capital — with growth taken from its own ten-year record rather than from guidance.
05What decides Adani Power's value
Plant load factor
Power stations have high fixed costs; running them harder spreads those costs and lifts profit sharply.
Contracted versus merchant sales
Long-term contracts give steady returns; merchant sales earn more in peak-demand years and less when prices fall.
Coal costs and pass-through
How much of a coal-price rise the contracts let it recover decides whether costs hit margins.
New capacity
Adani Power is building large amounts of new thermal capacity. Whether it earns more than its cost of capital is the biggest long-term question.
06What could go wrong
- Energy transition. Cheaper solar and storage could reduce demand for coal power faster than expected.
- Payment delays. State distributors have a history of paying late, which ties up cash.
- Group-level events. News about the wider Adani group can move the share price and funding costs.
07What the full Adani Power valuation shows
Sign in free to see the complete Adani Power valuation
- ✓Fair value per share — from a ten-year discounted cash flow, every step shown
- ✓The Workbench — change revenue growth, the discount rate or terminal growth and watch Adani Power's value move
- ✓Bull, base and bear cases — and exactly which assumptions move between them
- ✓Peer comparison — against NTPC, Adani Enterprises and Adani Ports
- ✓Downloadable report — the full write-up, yours to keep
08Compare Adani Power with peers
The same valuation, run side by side.
Adani Power vs NTPCPrivate thermal generation against the state-owned incumbent, on the same demand.→Adani Power vs Adani EnterprisesThe group parent, valued by its parts.→Adani Power vs Adani PortsAnother group company, on steadier contracted economics.→09Questions people ask about Adani Power
Why did Adani Power go from losses to big profits?
Higher plant utilisation, rulings that let it recover higher imported-coal costs, and the turnaround of plants it bought cheaply. Some of the peak profit was one-time income from settled claims, which the model does not treat as recurring.
Is Adani Power's profit sustainable?
The contracted part is steady; the merchant part and one-off items are not. The scenarios in the full valuation separate the two.
Adani Power or NTPC — which is better value?
NTPC is valued as a regulated utility and Adani Power on cash flow, so the comparison page sets them side by side on price, returns and what each share price assumes.
Is Adani Power overvalued?
At ₹206 the market is pricing in roughly 10% sustained growth, against the ~17% its own record supports. That is less than it has delivered — on these numbers the market is asking the business for less than its own record, which usually means it doubts the record repeats.
What is the intrinsic value of Adani Power?
It is computed from the filed financial statements using the method that fits this business (discounted cash flow), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
How much debt does Adani Power carry?
Debt to equity stands at 0.56, down from 2.63 at the start of the period — the balance sheet is a core input to the cost of capital used here.