The share price of Adani Energy Solutions has spent the entire year in the base-building phase. Due to an almost 25% decline in value, this Adani Group investment has produced no gains this year. However, according to Ventura Securities, the share price of Adani Energy Solutions has exited the base-building phase, and the stock of the Adani Group is expected to see a significant increase in value. Over the next two years, Adani Energy Solutions’ stock price can reach ₹1675 per share.
The Ventura Securities study highlights the factors that influence the price of Adani Energy Solutions’ stock, stating that “India’s transmission capacity is expected to grow from 523 km/1208 GVA in FY24 to 828 km/2093 GVA by FY34, driven by the government’s plans to double generation capacity to 900 GW.” Over the next ten years, ₹8.2 trillion will be invested in transmission infrastructure as part of this expansion, of which ₹2.3 trillion will come from private TBCB projects. AESL is in a strong position to benefit from these developments, holding around 30% of the private TBCB market. Additionally, the government’s move to permit private firms to get licenses for urban power distribution opens up new prospects for AESL.
“To fund its business expansion, AESL raised ₹8,373 cr via QIP in August 2024 at ₹976 per share — Adani Group’s first capital raise post-Hindenburg episode — attracting strong interest from global and domestic investors. Over FY24-27E, AESL’s revenue, EBITDA, and net profit are expected to grow at a CAGR of 19.8%, 31.0%, and 50.6%, reaching ₹28,544 crore, ₹12,843 crore, and ₹3,881 crore, respectively. EBITDA and net margins are projected to expand by 1060 bps to 45% and 675 bps to 13.6%,” the brokerage added.
Share price target
On the suggestion to stock market investors regarding Adani Energy Solutions shares, the Ventura Securities report said, “AESL’s robust fundamentals, strategic initiatives, and favourable industry dynamics reaffirm its long-term growth story. We recommend BUY with a DCF-based price target of ₹1,696 (19.6X FY27 EV/EBITDA). At the CMP of INR 772 (11.2X FY27 EV/EBITDA), the stock represents over 110% upside over 24 months.”
