Adani Energy Solutions: Target Price Set at Rs 1090 by Prabhudas Lilladher

Adani Energy Solutions (ADANIENS) Research Report

Key Highlights

Adani Energy Solutions is expected to witness a sharp acceleration in earnings, driven by growth in its core power transmission business and the rapidly scaling smart metering segment.

Growth Drivers

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• The power transmission segment, accounting for 57% of FY26E EBITDA, is expected to see significant capitalization increases from Rs40–50bn historically to Rs110–140bn during FY26E–28E, supported by a strong order book of Rs777bn scheduled for commissioning over the next 4–5 years.
• The smart metering business, accounting for 7% of FY26E EBITDA, offers significant growth potential, supported by a robust order book of 24.6mn meters and strong policy push from the government to reduce transmission and distribution (T&D) losses through large-scale smart meter deployment.
• The distribution segment, accounting for ~29% of FY26E EBITDA, is expected to benefit from privatization-led opportunities and operational improvements, supporting steady earnings growth over the medium term.

Outlook

The company's higher valuation reflects its stronger EBITDA growth outlook, with a projected 31% CAGR (FY26E-28E), compared to low-teens growth for peers.

Recommendation

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• We initiate coverage on Adani Energy Solutions with an 'Accumulate' rating.
• We assign a SoTP-based Target Price (TP) of Rs1,090.