The shares of Adani Energy Solutions, a division of the Adani Group, has dropped more than 6% year-to-date (2024). It increased just 14.5 percent during the previous year. Brokerage company Cantor expects potential multibagger gains for the stock despite its lackluster record.
The Adani Group stock has been called with a target price of ₹2,251, suggesting a huge potential upside of 130 percent from the present market price of ₹979. The recommendation is ‘overweight’.
Aside from distribution and transmission assets, Adani Energy Solutions (AESL) also operates a smart metering company. The brokerage stated that AESL, with an enterprise value of roughly $18.5 billion, offers a compelling opportunity in India’s quickly developing energy markets.
Cantor projects that between FY24 and FY27E, AESL’s total revenue will increase at a compound annual growth rate (CAGR) of 20%, while adjusted EBITDA will expand at a CAGR of 28.8%.
Peers, on the other hand, are expected to expand EBITDA in the mid-single digits and revenue in the low single digits. Even while AESL can seem more costly when looking at things in multiples, it is expected to grow much more quickly than its rivals.
The brokerage stated that considerable growth is anticipated due to AESL’s varied company structure. Within the next 18 to 24 months, nine recently awarded projects will be completed, benefiting the transmission segment.
Additional contract wins are anticipated. With 22.8 million smart meters in its backlog, the smart metering sector is expected to start turning a healthy profit. The distribution business is expected to increase at nearly double-digit rates.