Adani Power, Adani Green, Adani Energy: Buy, says Jefferies as it shares target prices

Jefferies has retained its 'Buy' on three Adani group stocks namely Adani Power Ltd, Adani Green Energy Ltd and Adani Energy Solutions Ltd. Jefferies' target price on Adani Power suggests 11 per cent potential upside. The foreign brokerage sees upsides of 1 per cent and 10 per cent, respectively, on Adani Green and Adani Energy.

In the case of Adani Power, Jefferies said the company management reiterated its target of expanding capacity by 2.3 times to 42 GW by FY32 and highlighted that thermal power remains critical for meeting India’s baseload demand. The foreign brokerage noted that 56 per cent of the upcoming 23.7 GW capacity is already locked in under long-term PPAs and the aim is to tie up 100 per cent, which lowers the risk profile further. 

"We believe Adani Power (APL) should see 23 per cent Ebitda CAGR over FY26-30E and turn FCF positive by FY30E from negative levels currently. Buy," it said while suggesting a target of Rs 255.  

Jefferies valued Adani Power at a premium to NTPC, given faster growth and some merchant upside also available in APL. 

In the case of Adani Green, Jefferies said the  company management reinforced confidence in its journey to raise capacity 2.6 times from 19.3 GW in FY26 to 50 GW by 2030, including 5 GW Pumped Storage Project (PSP). Ramping up Battery Energy Storage System (BESS) to 10 GWh+ in FY27E from 3GWh is top of mind given it enables selling power at peak rates at night, Jefferies said.

"Valuations are at a 56 per cent discount to their January 2023 peak 1-year forward EV/Ebitda which creates room for upside on execution. Buy," it said while suggesting a target of Rs 1,435 on the stock.

Jeffers said Adani Energy Solutions is India’s only listed private sector pure play on transmission and distribution assets. It said the company highlighted robust outlook for that India’s transmission. 

"Near-term bid pipeline is Rs 1.5 lakh crore against Rs 54,000 crore end FY25. Company is executing Rs 71,800 crore worth of transmission projects, up 20 per cent YoY. Smart meters is ramping up well and is a key growth driver going forward. The company is locked-in for double-digit medium-term growth. Buy," Jefferies said as it set a target price of Rs 1,665 on the stock. 

Jefferies said its target on Adani Energy based on 20 times estimated FY28 EV/Ebitda, which is a 14 per cent discount to AESL’s 10-year average. 

"CCI has dismissed a case against the group in India. We believe this does offer some group re-rating potential. Downside risks: 1) inability to maintain interest rate; and 2) market share loss," it said.