ADANIPOWER - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.5

📊 Fundamental Analysis Summary

Adani Power (ADANIPOWER) presents a strong case for long-term investment, combining attractive valuations, high capital efficiency, and improving financial health. Here's a breakdown of the key metrics

Metric Value Interpretation

Market Cap ₹2,28,563 Cr Large-cap — strong market presence

Stock P/E 17.9 Fairly valued — matches industry average

PEG Ratio 0.48 Undervalued relative to growth — strong long-term potential

ROE / ROCE 25.7% / 22.5% Excellent capital efficiency — supports compounding returns

Dividend Yield 0.00% No dividends — reinvesting for growth

Debt-to-Equity 0.70 Healthy leverage — well-managed for a power company

EPS ₹33.6 Strong earnings base

Book Value ₹146 Price-to-book ratio ~4.1× — premium, but justified by ROE

PAT Growth (QoQ) -11.6% Slight decline — needs monitoring

RSI / MACD 54.5 / +2.66 Neutral RSI; MACD positive — mild bullish momentum

FII/DII Holding Change +0.10% / +0.12% Institutional accumulation — positive sentiment

52W Price Range ₹431 – ₹753 Currently mid-range — decent entry opportunity

📉 Valuation & Entry Price Zone

With a PEG ratio well below 1 and strong ROE/ROCE, ADANIPOWER is undervalued relative to its growth potential. Technicals suggest mild bullishness, but not overheated.

Ideal Entry Zone: ₹540 – ₹580

This range offers a good margin of safety near the 50 DMA.

Accumulate gradually unless PAT continues to decline.

🧭 If You Already Hold the Stock

Holding Strategy

Time Horizon: 3–5 years, given strong fundamentals and sector tailwinds.

Exit Strategy: Consider trimming if price exceeds ₹720–₹750 without corresponding PAT growth.

Monitor: PAT trend, ROCE sustainability, and PEG ratio. If PEG rises above 1.0 and ROCE declines, reassess.

Key Triggers to Watch

PAT consistently above ₹2,500 Cr per quarter

ROCE maintained above 20%

PEG ratio staying below 0.6

🧠 Final Thoughts

Adani Power is one of the most fundamentally sound plays in the Adani group, with strong profitability, reasonable valuations, and improving institutional interest. It’s well-positioned for long-term investors seeking exposure to India’s energy infrastructure growth.

Would you like a comparison with other power sector leaders like NTPC or Tata Power to explore how Adani Power stacks up in terms of efficiency and valuation?

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