Following a recent analysis, global investment bank Jefferies has reiterated its 'Buy' ratings on several key Adani Group stocks, projecting significant upside potential. The foreign brokerage anticipates that Adani Power Ltd, Adani Green Energy Ltd, Adani Ports and SEZ Ltd, and Adani Energy Solutions Ltd could see their share prices rise by up to 53% over the coming 12 months.
Adani Power Ltd: Capacity Expansion and Profitability
Jefferies noted that Adani Power's management reaffirmed its ambitious goal to expand capacity by 2.5 times, reaching 45 GW by FY32. A significant portion (56%) of the upcoming 23.7 GW capacity is already secured under long-term Power Purchase Agreements (PPAs), with the company aiming for 100% tie-up, which is expected to further reduce its risk profile.
The brokerage believes Adani Power (APL) is poised for a 22% EBITDA Compound Annual Growth Rate (CAGR) between FY26-30E and is expected to become Free Cash Flow (FCF) positive by FY30E, moving from its current negative levels. Jefferies has set a target price of Rs 270 for Adani Power, suggesting a potential upside of 33%.
Adani Green Energy Ltd: Renewables and Storage Growth
Adani Green Energy's management expressed confidence in adding 5 GW of new capacity in FY27E. The company is strategically aligning its capacity addition timelines with transmission infrastructure development to mitigate curtailment risks. Plans to significantly ramp up Battery Energy Storage System (BESS) capacity from the current 3.6 GWh to over 10 GWh by FY27E are also on track.
While capacity tie-ups with Adani Energy Solutions (AESL) may cap merchant upside, Jefferies views this as a positive for improving earnings predictability. The firm has set a target price of Rs 1,695 for Adani Green Energy, indicating a 34% potential upside.
Adani Ports and SEZ Ltd: Cargo Growth and Digital Integration
Adani Ports (ADSEZ) remains confident in achieving its target of 1 billion tonnes of cargo by 2030. This growth is expected to be driven by organic expansion in domestic ports and the ramp-up of its international port operations. A key focus area for ADSEZ is integrating technology into its robust port infrastructure, with logistics identified as a vital growth enabler.
The company's balance sheet remains strong, with the potential to turn net cash by FY31E, providing ample room for future growth capital expenditure. Jefferies highlighted capital allocation as a key focus area and suggested a target price of Rs 2,160 for Adani Ports, implying a 25% potential upside.
Adani Energy Solutions Ltd: Transmission and Smart Meters
Adani Energy Solutions' management conveyed optimism regarding its Trading business prospects. They emphasized the robust outlook for India’s transmission sector and reiterated their guidance for a medium-term annual capital expenditure run-rate of Rs 20,000-25,000 crore.
Jefferies identifies smart meters and the trading business as key growth drivers moving forward. The foreign brokerage maintains a 'Buy' rating and has set a target price of Rs 2,060 for Adani Energy Solutions, suggesting the highest potential upside among the four stocks at 53%.
Disclaimer: This report is based on analysis by Jefferies and is for informational purposes only. Readers should consult with a qualified financial advisor before making any investment decisions.