With 50% rally in 2026, Adani Power now most valued power company in India: What's working in its favour

A near-50% surge in 2026 has turned Adani Power into India's most valuable listed power company. Its market capitalisation has climbed to Rs 4.24 lakh crore, edging past NTPC's Rs 3.9 lakh crore and cementing its position as the most valuable company within the Adani Group. The rally has been driven by strong earnings growth, rising electricity demand, and a steady accumulation of institutional interest in the stock.

The stock surge has also made Adani Power the most valuable company within the Adani Group itself. The valuation gap with peers is extraordinary. Adani Power alone is now worth more than Tata Power (approximately Rs 1.4 lakh crore), JSW Energy (Rs 98,000 crore), Torrent Power (Rs 85,000 crore) and CESC (Rs 24,000 crore) combined. It accounts for roughly 50–55% of the entire valuation of India's listed thermal and private power universe.

NTPC operates over 80 GW of installed capacity, nearly four times Adani Power's 18.2 GW, with sovereign backing, a diversified fuel mix, and deeper transmission integration. Yet the market has decided Adani Power is worth more.

Jefferies Raises Target; Sees Growth Runway Through 2030

Jefferies is among the most bullish voices on the stock. The brokerage recently raised its price target to Rs 255 from Rs 185, rolling over its valuation and lifting its multiple to 20x FY28 estimated earnings from 18x September 2027 estimates — "given rising power demand and healthy growth prospects for the next 3–4 years." The firm assigns Adani Power a 100% premium to NTPC's implied 10x multiple, citing "faster growth and some merchant upside also available."

Jefferies flagged that Adani Power's March quarter EBITDA came in 7% above estimates, driven by better-than-expected realisations and utilisation rates. Critically, some new thermal tariff PPAs (power purchase agreements) have been signed at close to Rs 6 per unit, compared to below Rs 5.5 earlier — a shift the brokerage says will materially improve profitability through FY28–FY30.

On capacity, the trajectory is steep: from 18.2 GW today, management targets 31 GW by 2030 and 42 GW by 2032, a nearly 2.3x expansion in six years.

Risks flagged by Jefferies include a resurfacing of past PPA disputes, a sharp drop in merchant realisations, demand disappointment, and payment delays from the 1.6 GW Godda plant that supplies power to Bangladesh under PPAs.

What's Driving the Re-Rating

At the core of Adani Power's bull case is a combination of operating leverage, merchant power exposure, and a structural demand tailwind that is reshaping how markets value thermal assets.

India is in the grip of an electricity supercycle. Record summer heat, accelerating AI and data centre demand, industrial expansion, and broad electrification trends are straining the grid. In that environment, thermal baseload capacity, which was written off as a stranded asset risk, has re-emerged as a strategic necessity. Adani Power is one of the largest and most direct beneficiaries of that shift.

The company's plant load factors (PLFs), a measure of operational utilisation, stand at an estimated 75–85%, ahead of NTPC's 70–77% and well above most private peers. This matters enormously for earnings: thermal generation has high fixed costs, and as utilisation rises, incremental revenue flows disproportionately to the bottom line. Adani Power's EBITDA growth has, as a result, accelerated sharply faster than sector peers.

Unlike NTPC, which operates largely under regulated return frameworks, Adani Power retains meaningful exposure to short-term merchant markets and peak-demand tariffs. During periods of demand stress, this creates asymmetric earnings upside.

The rally has been accompanied by a steady and significant build-up in institutional ownership, a signal that the re-rating is not purely momentum-driven. Mutual fund holdings in Adani Power have risen consistently over the past six quarters, climbing from 1.6% in December 2024 to 3.62% in March 2026. Broader institutional ownership has tracked the same direction, rising from 15.55% to 19.04% over the same period, a near 350 basis point increase that reflects growing conviction among professional investors in the stock's structural thesis.

Also read: Beyond Nifty: The 10 smallcap stocks that doubled investor wealth in the first 25 sessions of FY27

The valuation is not without risk. Continued outperformance assumes stable coal supply, supportive tariff structures, no major regulatory intervention, and sustained demand. Cyclicality in merchant tariffs, debt concerns, and the long-term threat from renewable energy displacement remain live risks.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)