A 57% surge in CY2026 has made Adani Power India’s most valuable listed power company, but the Q4 earnings quality deserves closer reading than the headlines suggest
Adani Power surpassed NTPC to become India’s most valuable listed power company on May 11, 2026, with its market capitalisation reaching Rs 4.34 lakh crore against NTPC’s Rs 3.53 lakh crore, a gap of over Rs 80,000 crore, per Tickertape and Motilal Oswal data. The company’s stock was trading at Rs 221.30, having surged approximately 57% in calendar year 2026 from its 52-week low of Rs 101 and touching a 52-week high of Rs 234.40 on May 5. It is now the most valuable company within the entire Adani Group, ahead of Adani Ports.
Q4 FY26: The Earnings Behind the Rally — With an Important Caveat
Also Read: ADANI POWER NSE Stock Price Today
Adani Power reported a 64% surge in consolidated net profit to Rs 4,271 crore in Q4 FY26, compared with Rs 2,599 crore in Q4 FY25, per the BSE exchange filing of April 29, 2026. Total income for Q4 FY26 came in at Rs 15,989 crore, up from Rs 14,535 crore in Q4 FY25.
The EBITDA number needs unpacking. Reported EBITDA rose 27% year-on-year to Rs 6,498 crore in Q4 FY26 from Rs 5,111 crore in Q4 FY25. But on a continuing basis, stripping out prior-period revenue recognition, EBITDA rose just 9.3% to Rs 5,573 crore. The gap between those two figures is explained by Rs 930 crore of prior-period revenue items recognised in Q4 FY26, compared with just Rs 13 crore in Q4 FY25. The 27% headline is technically accurate. The 9.3% continuing figure is what the underlying operational engine actually delivered.
The PAT surge is also partly tax-driven. Adani Power’s official press release explicitly attributes the Q4 and full-year PAT increase to “provision of lower tax expenses.” Q4 FY26 tax outgo fell to Rs 113 crore from Rs 457 crore in Q3 FY26, with deferred tax adjustments accounting for much of the swing. Investors reading the 64% PAT headline as a pure operational beat should note this.
For the full year FY26, consolidated PAT stood at Rs 12,971 crore, up just 1.7% from Rs 12,750 crore in FY25, per Power Peak Digest. The company generated 105 billion units of power for the year.
Jefferies reiterated its Buy rating post-results, raising its target price to Rs 255, citing better realizations, improved tariffs of approximately Rs 6 per unit, and the capacity expansion path to 42 GW by 2032, per Groww.
The PPA Revenue Book: 95% Locked In, Tariffs Rising
What separates Adani Power from most thermal peers is its revenue structure. Around 95% of operating capacity is now tied up under long- and medium-term PPAs. During Q4 FY26, the company secured a 1,600 MW long-term PPA from Maharashtra under the DBFOO model, and a subsidiary signed a 558 MW PPA with Tamil Nadu discom, per Tickertape.
New PPAs are being signed at approximately Rs 6 per unit, substantially above legacy tariffs, with fuel charges structured as a pass-through, insulating profitability from coal price swings, per Business Standard.
With 14 GW of under-construction capacity already tied to PPAs at attractive tariffs, and state DISCOMs floating new tenders for approximately 13 GW of additional capacity, the forward revenue pipeline is more visible than at any point in the company’s history. Net debt stands at Rs 45,022 crore, with a net debt-to-continuing EBITDA ratio of 2.12x and cash reserves of Rs 8,534 crore.
The PLF Risk the Rally Has Priced Out
That’s not the whole story, though. Full-year PLF for FY26 moderated to 66.5% from 70.5% in FY25, a 400 basis point compression, driven by all-India power demand growth of just 0.8% for the year, impacted by extended monsoon conditions and lower temperatures. Q4 PLF held at 74.0% versus 74.2% a year ago. Average market clearing price on IEX’s Day Ahead Market fell 13.7% to Rs 3.86/kWh for FY26, a direct headwind to merchant revenue.
Higher PLF equals higher revenue per installed megawatt. If demand softens or merchant prices stay subdued into FY27, PLF compression is the first operational warning signal to watch, and full-year continuing EBITDA for FY26 of Rs 21,285 crore was already marginally below FY25’s Rs 21,575 crore. That is not the trajectory reflected in a stock trading at 33.86x earnings.
The demand backdrop for FY27 is more constructive. All-India power demand rose 1.6% year-on-year to 422 billion units in Q4 FY26, with growth accelerating as summer arrived. Peak demand is forecast at 275–285 GW for FY27, per Business Standard and Mirae Asset Sharekhan. The structural demand drivers, data centre expansion, EV growth and consumer durables penetration are real, but they are multi-year themes, not Q1 catalysts.
The Institutional Angle: Free Float Is the Story
As of March 31, 2026, promoters hold 74.96% of Adani Power, while 30 mutual funds collectively held 3.62%, per Business Today. The absolute mutual fund holding looks small. The implication is not. ICICI Securities has explicitly noted that with 75% promoter ownership, incremental DII accumulation has an outsized price impact on a limited free float, domestic institutional investors, historically underweight on Adani Group stocks following the Hindenburg episode, are returning. That shift in ownership structure is a meaningful re-rating driver independent of earnings.
The Valuation: Premium Is Real, Risk Is Real
Adani Power trades at a P/E of 33.86 and a P/B of 7.52 as of May 11, 2026, per Tickertape. Compare: NTPC at P/E 14.67 and P/B 1.85; Tata Power at P/E 30.78, per Motilal Oswal. The premium is substantial and is priced for a specific future, capacity expansion executing on schedule, new PPAs delivering at Rs 6/unit, and India’s power demand growing 6–7% annually through FY30.
JM Financial has downgraded Adani Power to ‘Reduce’ with a revised target of Rs 202, noting the stock has run over 45% in the past month and now trades at 17x EV/EBITDA, a rare sell-side downgrade on a stock that has nearly tripled from its lows. The JM Financial bear case flags that the valuation already prices in several years of flawless execution, with the bull case requiring merchant price recovery and interest rate stability through FY28, per Business Today.
ICICI Securities justifies a 20x FY28 EV/EBITDA multiple, a 100% premium to NTPC’s implied 10x, on the basis of faster earnings growth over the next three to four years.
Adani Power’s 30th AGM is scheduled for June 25, 2026, where MD reappointment and capital allocation plans for the 42 GW expansion will be items to watch.
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FAQs
Q. Why did Adani Power surpass NTPC in market cap in 2026?
Adani Power’s market cap crossed Rs 4.34 lakh crore vs. NTPC’s Rs 3.53 lakh crore on the back of a 57% CY2026 rally driven by three factors: strong Q4 FY26 reported earnings (PAT +64% YoY to Rs 4,271 crore); new PPAs at Rs 6/unit lifting revenue visibility with 95% capacity locked in under long-term contracts; and incremental domestic institutional accumulation in a stock with limited free float. NTPC’s regulated cost-plus model offers stability but significantly lower growth; the market re-rated Adani Power’s growth premium sharply higher.
Q. Is Adani Power stock overvalued at current levels?
Views are split with a bearish tilt from sell-side. Jefferies has a Buy at Rs 255, citing EBITDA beats and the 42 GW capacity expansion path. JM Financial has been downgraded to Reduce with a target of Rs 202, flagging 17x EV/EBITDA after the recent run-up as a valuation that prices in flawless execution through FY28. At P/E 33.86 versus NTPC’s 14.67, the premium is only justified if new capacity additions, higher-tariff PPAs, and demand recovery all execute simultaneously as guided, and full-year continuing EBITDA for FY26 was already marginally below FY25 levels.
Q. What is Adani Power’s target price for 2026?
Jefferies targets Rs 255 (Buy). JM Financial targets Rs 202 (Reduce). The bull case is anchored to FY27–FY28 EBITDA delivery on the 14 GW under-construction pipeline and higher-tariff PPAs at Rs 6/unit. The bear case rests on the 17x EV/EBITDA valuation, leaving no room for execution slippage, merchant price softness (IEX Day Ahead average fell 13.7% in FY26 to Rs 3.86/kWh), or demand disappointment. The Q1 FY27 earnings call, due around August 2026, and the commissioning timeline for Mahan Phase-II (86% complete), Raipur Phase-II (54%), and Raigarh (47%) will be the next material catalysts.
All data sourced from Adani Power BSE exchange filing and official press release dated April 29, 2026; Business Standard; Tickertape; Screener.in; Jefferies research note; JM Financial analyst note; Power Peak Digest; ICICI Securities note; Motilal Oswal. Share price and market cap as of May 11, 2026. This article is for informational purposes only and does not constitute investment advice.
