Adani Power Limited Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
As you might know, Adani Power Limited (NSE:ADANIPOWER) just kicked off its latest interim results with some very strong numbers. Adani Power delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting ₹383b-12% above indicated-and₹6.08-49% above forecasts- respectively Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Adani Power after the latest results.
Taking into account the latest results, Adani Power's 13 analysts currently expect revenues in 2027 to be ₹658.4b, approximately in line with the last 12 months. Statutory earnings per share are forecast to plunge 26% to ₹6.99 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹638.1b and earnings per share (EPS) of ₹6.57 in 2027. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
See our latest analysis for Adani Power
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of ₹242, suggesting that the forecast performance does not have a long term impact on the company's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Adani Power analyst has a price target of ₹272 per share, while the most pessimistic values it at ₹210. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Adani Power's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 2.5% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 16% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Adani Power.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Adani Power's earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Adani Power analysts - going out to 2029, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Adani Power that we have uncovered.
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