Adani Energy Solutions (AESL) has been in a consolidation phase for much of the year, delivering flat returns with a notable 25% downside. However, Ventura Securities sees a shift in the stock’s trajectory, predicting a strong upside movement ahead. According to their analysis, AESL’s share price could surge to ₹1,675 per share over the next two years.
Why Adani Energy Solutions Could Be Poised for Growth
Ventura Securities highlights several key factors contributing to AESL’s potential for growth. India’s transmission capacity is expected to grow significantly, from 523 km/1208 GVA in FY24 to 828 km/2093 GVA by FY34. This expansion aligns with the government’s goal of doubling generation capacity to 900 GW, supported by an ₹8.2 trillion investment in transmission infrastructure over the next decade. Notably, ₹2.3 trillion will be through private TBCB (Tariff-Based Competitive Bidding) projects, a sector where AESL holds a dominant position with a 30% market share.
In addition to this, the government’s move to allow private companies to acquire urban power distribution licenses is another catalyst for AESL’s growth. These developments position AESL to capture significant opportunities in the expanding market.
Recent Capital Raise and Growth Prospects
To further fuel its expansion, AESL successfully raised ₹8,373 crore in August 2024 through a QIP (Qualified Institutional Placement) at ₹976 per share, marking Adani Group’s first capital raise after the Hindenburg episode. The strong response from both domestic and global investors underscores confidence in the company’s future.
Looking ahead, AESL is expected to achieve impressive growth, with revenue, EBITDA, and net profit projected to increase at CAGRs of 19.8%, 31.0%, and 50.6%, respectively, from FY24 to FY27. The company’s EBITDA and net profit margins are expected to expand by 1060 bps to 45% and 675 bps to 13.6%, further bolstering its financial position.
Buy with Strong Upside Potential
Given AESL’s robust fundamentals and favorable industry dynamics, Ventura Securities recommends the stock as a BUY, with a DCF-based price target of ₹1,696 (19.6X FY27 EV/EBITDA). At its current market price of ₹772 (11.2X FY27 EV/EBITDA), AESL offers more than 110% upside potential over the next 24 months, making it an attractive investment for long-term growth.
