Citi cuts price target for Adani Power to Rs34/share from Rs40/share

MUMBAI: Citi cut its price target for Adani Power's stock to Rs34 apiece from Rs40, while maintaining its sell rating to factor in a decrease in earnings estimates.

"Given we have seen Tata Power book losses on a regulated RoE project like Maithon, Adani Power's Rs7.9bn standalone loss and Rs8.1bn cons. loss does not surprise us. We are not comfortable assuming fuel creditor forex fluctuations as exceptional," said Citi analysts led by Venkatesh Balasubramaniam in a note to clients.

On Friday, Adani Power shares fell 1% to close at Rs42.85.

"The company is staring at an overleveraged balance sheet, PPAs with limited maneuverability, coal shortages and high fuel costs," the Citi analysts said.