Brokerage firm Motilal Oswal has initiated coverage of Adani Power with a Buy rating and a target price of Rs 250, implying upside of around 20% for the stock.

The brokerage identified several key growth drivers behind its positive stance on the company. These include Adani Power's ongoing capacity expansion, its established track record of turning around distressed power assets, and a potential entry into nuclear power.

The coverage initiation frames Adani Power's investment case around five main pillars: capacity expansion, earnings outlook, the thermal power upcycle, the company's distressed-asset strategy, and future optionality.

The initiation comes amid a broader revival in India's thermal power sector, where electricity demand growth has outpaced supply in recent years and power shortages during peak summer months have renewed attention on coal-based generation capacity after a decade in which new thermal projects slowed.

For Adani Power, the potential nuclear power entry reflects wider policy momentum: the Indian government has moved to open nuclear energy development to private sector participation and amended atomic energy legislation to enable it, giving large power producers a new long-term growth avenue to watch.

The brokerage's stance signals analyst attention on whether Adani Power can sustain earnings momentum as its expansion projects come online, a trajectory investors can track through upcoming quarterly results and updates on new capacity.

Source: Economic Times Markets