UBS downgrades Adani Power to 'sell' from 'buy'

UBS AG has downgraded Adani Power to "sell" from "buy" and cut the price target to 110 rupees from 160 rupees citing current stock price does not factor in risks such as decline in merchant tariffs. In a note, the Swiss investment bank said profitability of the company will be impacted due to lower tariffs.

"We like the company for its strong execution but believe that the current stock price does not fully factor in the risks," it said. UBS has cut its earnings per share estimates for Adani by 58 percent, 40 percent and 38 percent respectively for fiscal 2011, fiscal 2012 and fiscal 2013.

At 11.26 a.m., shares of the company were down 0.93 percent at 117.80 rupees in a firm Mumbai market.