The energy solutions sector in India is a rapidly growing industry driven by the increasing demand for sustainable energy, smart technologies, and efficient infrastructure. It encompasses power transmission, distribution, smart metering, and cooling solutions, all crucial for modernizing India’s energy grid and reducing carbon footprints. The sector is seeing significant growth as India aims to transition to renewable energy sources and improve energy efficiency.
Key listed companies in this space include Adani Energy Solutions, NTPC, Power Grid Corporation of India, Sterlite Power, and Siemens India, among others. These companies are investing heavily in renewable energy projects, power infrastructure, and smart grid technologies, positioning themselves to play a crucial role in India’s energy future. The sector’s growth prospects remain strong due to favorable government policies and the push for energy sustainability.
Share Price
The share of Adani Energy Solution is currently trading at Rs. 744 and is trading flat from its previous close of Rs. 744.47. The stock also touched an intraday low of Rs. 743 as of January 30, 2025.
Recent Updates
Jefferies Maintains ‘BUY’ Rating on Adani Energy Solutions
Global brokerage firm Jefferies has maintained a ‘BUY’ rating on Adani Energy Solutions, with a favorable outlook for the stock over the next 12 months. Jefferies sees a potential upside of more than 100%, predicting the stock could rise significantly from its current levels. The brokerage emphasizes that the risk-to-reward ratio for the company is highly favorable, with an upside-to-downside ratio of 6.58:1. This optimistic view reflects the company’s strong operational performance and future growth prospects in the power transmission and smart metering sectors.
Strong Q3 Performance
In its Q3 update, Adani Energy Solutions reported impressive operational performance, maintaining system availability at 99.7%, a key indicator of the company’s reliability in power transmission.
The company expanded its transmission network by 225 circuit kilometers (ckm), bringing the total network length to 26,485 ckm. Additionally, its project pipeline grew substantially, with the value of its projects surging from ₹170 billion to ₹547 billion at the start of FY25, further bolstering its growth trajectory. The company’s market share in competitive bids has increased to 24%, up from 17%, due to securing two transmission bids in Rajasthan linked to renewable energy parks.
Focus on Smart Metering
Jefferies highlighted the company’s growing focus on smart metering, a high-growth area that is expected to contribute significantly to future revenue streams. Adani Energy Solutions is executing smart metering projects covering 22.8 million meters, with an estimated value of ₹272 billion.
The company is targeting the addition of 4.5 million meters by the end of FY25, with a goal of 10 million meters by FY26. This positions the company to capture significant market share in India’s evolving smart metering and distribution sector.
Robust Financial Projections
Looking ahead, Jefferies forecasts strong growth for Adani Energy Solutions, projecting a 16% compound annual growth rate (CAGR) in revenue and a 62% CAGR in profit after tax (PAT) from FY24 to FY27. This growth will be fueled by the company’s strong positions in both its Transmission and Distribution businesses. The firm is expected to commission transmission projects worth ₹273 billion by October 2026, further expanding its infrastructure footprint and supporting future revenue growth.
Jefferies’ Base Case and Target Price
In its base case, Jefferies has set a target price of ₹1,300 per share for Adani Energy Solutions, which represents a 74% upside from its current price of January 30, 2025. This target is based on an expected 16% revenue and 31% EBITDA CAGR from FY24 to FY27, driven by the company’s growing market share in Transmission and Bulk Power Transmission (TBCB). The target price is derived from a 15x EV/EBITDA multiple for FY27, reflecting the company’s solid growth prospects.
Potential Upside and Downside Scenarios
Jefferies also provides an upside and downside scenario for Adani Energy Solutions’ stock price. In an upside scenario, the target price could reach ₹1,624, implying a potential 117% upside, assuming the company benefits from the Distribution Amendment Act and secures additional projects under TBCB (Tariff Based Competitive Bidding).
Conversely, in a downside scenario, the target price could drop to ₹652, reflecting a 12% downside, should the company experience a reduction in market share or delays in project commissioning. Overall, Jefferies maintains a bullish outlook on the company, with significant upside potential.
Written By: Dipangshu Kundu
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