Adani Group stock headed for 41% upside after multiple downgrades post Q4 earnings?

Adani Energy Solutions shares: Shares of Gautam Adani-led Adani Group were seen rallying higher on Tuesday but majority of the stocks gave up their early gains. Interestingly, one of the Adani Group stocks — Adani Energy Solutions — appears to be set for a over 40 per cent rise based on the stock technical patterns. However, the stock saw a number of downgrades post its Q4 results.

Shares of Adani Energy Solutions Ltd rose more than 2.5 per cent to Rs 1,361.90 on Tuesday, with a market capitalization close to Rs 1.65 lakh crore. However, the stock gave up its gains to slip to Rs 1,312.25 during the day. The stock is nearly 10 per cent from its 52-week high at Rs 1,463 hit on April 28, 2024 ahead of its Q4 results.

In other news, the Gautam Adani-led conglomerate has reached a settlement with the US Treasury Department's Office of Foreign Assets Control (OFAC) in an alleged sanctions violation related to Iran-linked LPG transactions. The group would pay a total of $275 million, without admitting the allegations made by OFAC.
 

Adani Energy Solutions Q4 results
Adani Energy Solutions reported a 27.7 per cent jump in the net profit on a year-on-year (YoY) basis to Rs 723 crore, while revenue from operations increased 6.9 per cent YOY to Rs 4,400 crore. Its consolidated ebitda rose 5 per cent YoY to Rs 2,372 crore, even as the margins remained under the pressure for the quarter.

Adani Energy Solutions: Downgraded post Q4 results
"Adani Energy is poised for robust growth across transmission, distribution, and smart meters. We value the regulated distribution and transmission assets on 3 times FY28E P/BV. We ascribe 12 times FY28E EV/Ebitda to its (TBCB) transmission assets and 12 times FY28E EV/Ebitda to smart metering," said Elara Capital which downgraded the stock to accumulate but increased target price of Rs 1,452.

Adani Energy Solutions continues to demonstrate superior execution performance across businesses. We are raising the target FY28E EV/Ebitda for transmission/smart metering to 15 times/13 recognising 40 per cent growth in transmission capitalisation in FY29E and swift progress in rolling out smart meters, said JM Financial with an 'add' rating and revised target price of Rs 1,513.

Adani Energy reached a critical operational turning point in FY26 by commissioning the landmark Mumbai HVDC project in Q4FY26. Operationally, the smart metering segment exceeded its annual installation target of 7Mn units, successfully deploying 8.3 Mn meters—bringing the cumulative total to approximately 11.3 million units, said IDBI Capital.

The emerging commercial and industrial segment is also gaining traction, with 5,000 GW of renewable capacity already contracted. This positions AESL to capture substantial demand from India's growing data center market. The recent price appreciation implies it trades at a significant premium to its peer group," it added but downgraded the stock to 'hold' with a target price of Rs 1,448.

The transmission business continues to provide strong visibility, with the order book increasing to Rs 71,800 crore in FY26 and management guiding for a robust opportunity pipeline for next 12 months.  The smart metering segment builds a longer-term growth runway supported by a sizable untapped opportunity of 90- 100 million meters across various states, said PL Capital.

"Despite this strong growth outlook, the recent stock price appreciation leaves valuations at 17.5 times FY28E EV/Ebitda, implying a meaningful premium to peers trading at 8–12 times, thereby limiting near-term upside; accordingly, we change the stock to 'hold' (from Accumulate) with a revised SOTP-based target price of Rs 1,452," it added.
 

Why SMIFS see a 41% rise in Adani Energy Solutions?

Adani Energy has delivered a strong breakout on the weekly chart after a prolonged base/consolidation phase. Price is currently hovering near the breakout-retest band, indicating a healthy pullback/absorption. The Rs 1,240–1,200 zone is a key 'breakout retest' support area and offers a favorable risk-reward for accumulation from an MTF positional perspective, said SMIFS.

Post-breakout price action shows a retest/throwback attempt near the breakout area. Trend structure is improving with higher highs and higher lows developing post-base. Volume activity expanded during the breakout leg versus the prior consolidation, indicating stronger participation. Price is sustaining above key long-term trend references on the chart, supporting a bullish medium-term bias, it said.

SMIFS has suggested to buy the stock on dips, staggered buying in Rs 1,240–1,200 zone, with a target price of Rs 1,800 and a stop loss of Rs 1,180 on a closing basis for a 3-6 months period. It presents a classic weekly breakout with an attractive risk-reward profile for positional traders, the brokerage firm added.