Global brokerage firm Jefferies has reiterated its 'Buy' recommendations for three key Adani Group entities: Adani Power Ltd, Adani Green Energy Ltd, and Adani Energy Solutions Ltd. The firm projects significant upside potential for these stocks, driven by robust expansion strategies and strong project execution across their respective sectors.
Adani Power: Capacity Expansion and Strong Fundamentals
Jefferies has set a target price of Rs 255 for Adani Power, suggesting an 11% potential upside. The brokerage noted management's ambitious goal to expand capacity by 2.3 times to 42 GW by fiscal year 2032. A substantial 56% of the upcoming 23.7 GW capacity is already secured under long-term Power Purchase Agreements (PPAs), with an aim to tie up 100%, significantly de-risking future revenues.
“We believe Adani Power (APL) should see 23% Ebitda CAGR over FY26-30E and turn FCF positive by FY30E from negative levels currently. Buy,” Jefferies stated, valuing Adani Power at a premium to NTPC due to its faster growth trajectory and merchant upside.
Adani Green Energy: Renewable Growth and Storage Solutions
For Adani Green Energy, Jefferies sees a 1% upside, with a target price of Rs 1,435. The company is confident in its plan to increase capacity 2.6 times, from 19.3 GW in FY26 to 50 GW by 2030, which includes a 5 GW Pumped Storage Project (PSP). A key focus is the rapid scaling up of Battery Energy Storage Systems (BESS) to over 10 GWh by FY27E from 3 GWh, enabling the sale of power at peak rates during the night. Jefferies highlighted that current valuations are at a 56% discount to their January 2023 peak, creating room for upside.
Adani Energy Solutions: Transmission and Distribution Leadership
Jefferies assigned a target price of Rs 1,665 for Adani Energy Solutions, indicating a 10% potential upside. The firm highlighted Adani Energy Solutions as India's sole listed private sector pure-play in transmission and distribution assets. The company faces a robust outlook for India's transmission sector, with a near-term bid pipeline of Rs 1.5 lakh crore, a significant increase from Rs 54,000 crore at the end of FY25. The company is currently executing transmission projects worth Rs 71,800 crore, a 20% year-on-year increase, and smart meter deployment is emerging as a critical growth driver.
Broader Group Re-rating Potential and Risks
The brokerage also mentioned that the Competition Commission of India (CCI) dismissing a case against the group could offer some re-rating potential for the Adani conglomerate. However, Jefferies also identified potential downside risks, including the inability to maintain interest rates and market share loss.