Why Antique sees 40% upside for Adani Power even as Q3 profit dips 19% YoY

Antique Stock Broking sees nearly 40 per cent upside in Adani Power Ltd. stock, even after the company reported a dip in December quarter profit, citing steady execution and long-term earnings visibility.

 

In a note following the December-quarter results, Antique said Adani Power navigated a challenging operating environment in the third quarter of financial year 2025-26 (Q3-FY26), marked by subdued power demand and softer merchant prices. 

 

Adani Power reported a consolidated net profit of ₹2,480 crore for Q3FY6, down 19 per cent from ₹3,057.21 crore during the same period last year. On a sequential basis, profit declined 16 per cent from ₹2,952.78 crore. 

 

 

The company attributed the decline in profit to lower one-time prior period income recognised during the quarter, as compared to the corresponding quarter of FY25. The firm's revenue from operations fell 9 per cent year -on-year (Y-o-Y) and 7.5 per cent sequentially to ₹12,451.44 crore.  ALSO READ | Vedanta share tanks 8% amid profit booking; Q3, demerger keep bulls hopeful 

"We are swiftly securing long-term power purchase agreements for our upcoming capacities, with nearly half of our 23.7 gigawatt (GW) expansion already tied up in power purchase agreements (PPAs) with State DISCOMs," said SB Khyalia, chief executive officer (CEO) of Adani Power.

 

Plant load factor eased to 63 per cent from 64 per cent, Antique said, while merchant volumes fell 6.5 per cent Y-o-Y to 4.3 billion units. Merchant realisations softened to ₹4.37 per kilowatt-hour from ₹4.56 per kilowatt-hour, reflecting sharply lower day-ahead power prices.

 

Ebitda declined 15.6 per cent Y-o-Y to ₹4,240 crore, with margins contracting to 34.0 per cent from 36.7 per cent. Antique attributed the pressure to lower merchant tariffs and import coal-linked charges, partly offset by around 10 per cent lower fuel costs. 

 

The brokerage noted that the merchant mix reduced to 18 per cent from 20 per cent a year ago, weighing on profitability and contributing to the earnings miss. While Antique has revised its FY26 estimates downward to factor in cyclical softness, it has retained its FY27 and FY28 forecasts, citing confidence in execution and capacity-driven growth.  ALSO READ | Acme Solar Holdings shares gain 5% on Q3 results; check key numbers here 

Antique maintained its 'Buy' rating on the stock with a target price of ₹187 (40 per cent upside), valuing Adani Power at 15 times its FY28 estimated Ebitda, supported by discounted cash flow assumptions.

Adani Power share price history

The power generation company's stock rose as much as 1.18 per cent during the day to ₹135.4 per share. The stock pared gains to trade 0.2 per cent higher at ₹134 apiece, compared to a 0.57 per cent decline in Nifty 50 as of 10:30 AM. 

 

Adani Power counter has fallen 6.3 per cent this year, compared to a 3.4 per cent decline in the benchmark Nifty 50. Adani Power has a total market capitalisation of ₹2.58 trillion. 

 

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