By Admin 
Adani Power Share: Shares of Adani Power Limited fell by 3 percent on Friday. In fact, in the September quarter results, this company of Adani Group recorded a decline of 11 percent in net profit.
The company earned a profit of Rs 2,906.46 crore during this period, while sales stood at Rs 13,106.34 crore. Its effect was visible on the shares. The share fell 3 percent to a low of Rs 157.60. However, despite this, brokerages are bullish. ICICI Securities has increased its target price from Rs 134 to Rs 187, which shows a potential upside of 19 percent from the current price.
Why is brokerage so confident?
The brokerage said that Adani Power has entered into several power purchase agreements (PPAs) at attractive tariffs and the outlook for the company’s coal PPAs also remains strong.
ICICI Securities says, Adani Power has doubled its construction capacity (25 GW vs earlier 12 GW). It has signed power purchase agreements of 11 GW (including 2.4 GW L1 project in Assam) at attractive tariffs. Moreover, it is ahead of other companies of its level as it has already placed BTG orders for the entire construction portfolio. We expect a large portion of the remaining portfolio to be completed under long term PPA in the next 12-18 months.
Brokerage advised to buy
During July to September, Adani Power sold 24 units of electricity, which shows a growth of 7 percent on year-on-year basis. During this period, merchant realization remained 9 percent less year-on-year. The company recorded a PLF of 63 percent, which is down by 410 basis points (BPS) year-on-year.
“As a result, it reported revenue of Rs 134 billion (up 1% YoY) and EBITDA of Rs 50 billion (down 2% YoY) – which is in line with our estimates. Given the strong pipeline of projects and strong valuations, we are recommending a Buy share at a revised price of Rs 187,” ICICI Securities said.
They also have expectations from shares
Apart from ICICI Securities, Morgan Stanley, Jefferies and Cantor Fitzgerald all remain positive on Adani Power shares. Everyone increased their target price for the stock on Friday.
Morgan Stanley reiterated its ‘overweight’ rating on Adani Power. The brokerage has kept its target price at Rs 163.60, which is 1 percent more than the closing price of Rs 162.57 on October 30. Meanwhile, Jefferies also maintained its ‘buy’ rating and raised the target price to Rs 195 from Rs 138 earlier – indicating an upside of 20 per cent.
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