Mumbai, 19 September (IANS). Global brokerage firm Morgan Stanley advised ‘Overweight’ and gave a target price of Rs 818 on Adaani Power Limited (APL) on Friday, which is 29 percent higher than closing of the last trading session.
Brokerage said in a note that Adani Power is a good example of turnout in India’s corporate history, including the solution of most regulatory issues and the acquisition of several values. “
Brokerage said, “APL will register a strong income increase by completing the time of projects on time and over the medium period.”
Morgan Stanley said that new coal power procurement agreements (PPAs) will increase the confidence of investors in the company’s income capacity.
Global brokerage said in its estimate, the company’s EBITDA will increase by 2.5 times or 3 times by financial year 33.
According to a brokerage firm note, “We believe that coal is important in India’s energy security, and nuclear power will play an important role in it in the next decade. India is planning to add 80 GW of coal production to the 32nd Five Year Plan and currently the larger power purchase agreement (PPA) of 20 GW is in pipeline.”
The shares were trading with a gain of about 7-8 percent in the morning trading. Adani Power’s stocks closed with a gain of 0.5 percent in the last season.
Adani Power is India’s largest independent power producer and the second largest power producer (after NTPC), which has an 8 percent share in both coal and production.
Brokerage said, “We estimate that its market share will reach 15 percent to F33E with portfolio 41.9 GW (2.5 times compared to F-25). APL has found a favorable solution to most regulatory issues and its balance sheet is strong. We hope that its 27 billion dollars will be fulfilled from 60-65 percent internal sources of its dollars for additional capacity of 23.7 GW.
Timely completion of projects (land acquisition, boiler-tabine-generator order, construction work by Adani group, and low external debt) and signing of PPA will increase income.
“If the APL merchant portfolio currently decreases by 20 percent and recently acquired the profitability of 2.9 GW power plants improves, we expect an increase in our estimates.”
-IANS
ABS/