Shares of Adani Energy solutions have seen a sharp recovery in the past few weeks.
The Adani Group stock has raced up around 30% in the last 30 days but remains in the red on a year-to-date basis.
However, Ventura Securities analysts see the stock turning things around.
The analysts remain bullish on the stock citing the company’s dominant position in India’s private power transmission sector and its strategic diversification into the smart meter segment as key growth drivers.
The brokerage firm highlighted the company’s resilience in the face of recent stock volatility following fresh legal troubles for the Gautami Adani-led conglomerate in November 2024, underpinned by robust fundamentals and operational strength.
Adani Energy share price target
Ventura analysts recommend a “buy” on the energy stock with a 24-month price target of ₹1,696.
The target reflects an over 116% upside from the stock’s last closing price of around ₹770.
Adani Energy’s key to success
Ventura analysts highlighted Adani Energy’s expansion in its transmission asset portfolio since April 2024, including Khavda IV A, Khavda IV D, Navinal, Jamnagar, and the acquisition of the Mahan-Sipat transmission asset.
The company’s foray into the smart meter segment, involving supply and installation across nine regions, generated ₹453 crore in revenue.
Analysts see this diversification as a strategic move to capture growth in India’s evolving energy infrastructure.
Ventura highlighted AESL’s strong distribution business, which delivers a 15% Return on Assets (RoA) and is supported by a capex plan exceeding ₹100 billion over the next six years. This is expected to drive significant EBITDA growth.
India’s transmission capacity is projected to show healthy growth, requiring ₹8.2 trillion in transmission infrastructure investments.
Of this, ₹2.3 trillion will come via private TBCB projects.
Analysts believe AESL, which holds a ~30% share of the private TBCB market, is well-positioned to benefit from this growth.
The government’s decision to permit private companies to acquire urban power distribution licenses presents additional opportunities for the energy major.
Over FY24-27, Ventura forecasts the company’s revenue, EBITDA, and net profit to grow at CAGRs of 19.8%, 31.0%, and 50.6%, respectively, reaching ₹28,544 crore, ₹12,843 crore, and ₹3,881 crore.
EBITDA and net margins are expected to expand by 1060bps to 45% and 675bps to 13.6%, respectively.
Adani Energy’s bull and bear case scenarios
Ventura Securities outlined Bull and Bear case scenarios for Adani Energy, based on key parameters such as revenue growth, EBITDA margins, and EV/EBITDA multiples by FY27.
In the Bull case, Ventura assumes the Adani Group company’s revenue will reach ₹30,000 crore, reflecting a CAGR of 21.8% over FY24-27.
The EBITDA margin is projected at 47%, with an EV/EBITDA multiple of 20x.
Under these assumptions, the target price is set at ₹1,923, representing an upside of 149.1% from the last closing price.
In the Bear case, the revenue is estimated to grow at a slower CAGR of 6.4%, reaching ₹20,000 crore.
The EBITDA margin is expected to compress to 40%, with an EV/EBITDA multiple of 15x.
This scenario yields a target price of ₹649, implying a downside of 15.9% from the last closing price.
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