Shares of Adani Energy Solutions Ltd (AESL) increased by 2.5% to Rs 1,013 each on Thursday, following Morgan Stanley’s coverage initiation, despite overall market downturns. The foreign brokerage assigned an ‘overweight’ rating to AESL, setting a price target of Rs 1,133, indicating a 16% potential upside from the previous day’s closing price.
Morgan Stanley views AESL as a significant beneficiary of India’s extensive power grid expansion, with an anticipated investment of over Rs 10 trillion in transmission over the next ten years. The brokerage also acknowledges policy backing for smart metering in distribution, including subsidies and measures encouraging private involvement.
Highlighting AESL’s commendable execution history, Morgan Stanley notes the company’s efficient project delivery in transmission, distribution, and smart metering sectors, positioning it as a comprehensive grid infrastructure provider. Adani Energy Solutions is recognized as a prominent private-sector player in transmission and distribution, holding nearly 50% of private-sector transmission projects and serving around 3.3 million consumers in Mumbai and Mundra SEZ distribution areas.
The report forecasts a 21% EBITDA Compound Annual Growth Rate (CAGR) between FY25 and FY30, with EBITDA expected to reach approximately Rs 2,600 crore by FY30. Growth drivers include transmission project wins, regulated distribution capital expenditure, and smart metering order book execution.
Morgan Stanley anticipates transmission to be the primary growth driver in the near to medium term, supported by an order book of about Rs 7,800 crore as of Q3 FY26. The brokerage suggests that AESL could secure approximately 20% of new TBCB projects, representing an annual opportunity of Rs 20,000 crore.
