Jefferies has maintained its Buy rating on Adani Power, Adani Energy Solutions and Adani Green Energy, with the brokerage pointing to capacity expansion, long-term power purchase agreements, transmission spending, trading and battery storage as key areas of growth.
Jefferies has a target price of Rs 270 for Adani Power, Rs 2,060 for Adani Energy Solutions and Rs 1,695 for Adani Green Energy.
The brokerage's latest assessment follows management discussions on capacity expansion and the outlook for the three businesses.
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Adani Power
Jefferies said Adani Power's management reiterated its plan to increase capacity 2.5 times to 45 GW by FY32.
Of the company's upcoming 23.7 GW capacity, 56% is already tied up through long-term power purchase agreements. Management aims to take this to 100%, which Jefferies said would further lower the risk profile.
The brokerage expects Adani Power's EBITDA to grow at a compound annual rate of 22% between FY26 and FY30E. It also expects the company to turn free cash flow positive by FY30E from negative levels currently.
Adani Energy Solutions
Jefferies said management remains upbeat about the prospects of Adani Energy Solutions' trading business and highlighted the strength of India's transmission outlook.
The company has reiterated its guidance for a medium-term annual capital expenditure run rate of Rs 20,000-25,000 crore, according to the brokerage.
Jefferies said the smart metering and trading businesses are ramping up and will be key growth drivers going forward.
Adani Green Energy
Jefferies said Adani Green Energy's management remains confident of adding 5 GW of capacity in FY27E.
The company is aligning capacity additions with the availability of transmission infrastructure to reduce the risk of curtailment, the brokerage said.
Its plan to increase Battery Energy Storage System capacity from 3.6 GWh currently to more than 10 GWh by FY27E remains on track, according to Jefferies.
The brokerage said the capacity tie-up with Adani Energy Solutions limits the upside from selling power in the merchant market, while making earnings more predictable.
(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)
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