Adani Group stock to buy now for an upside potential of more than 35%; Do you own it?

Adani Group’s transmission business is expected to see its EBITDA double by FY27, driven by India’s ambitious renewable energy goals. With a robust project pipeline and strong bidding activity, analysts are closely watching the group’s growth prospects, and here’s an overview of the expected financial growth and target price updates for Adani Group stocks.

Price Action

In Monday’s trading session, shares of Adani Energy Solutions Ltd reached an intra-day high of Rs.678.95 apiece, rising 1.2 slightly from its previous close of Rs.670.95 each. The stock later retreated to Rs.677.75 per share. 

Reason for Rise

Driven by India’s renewable energy targets, Adani Energy Solutions is projected to see its transmission EBITDA double to Rs.7,600 crore by FY27. AESL’s current project pipeline stands at Rs.54,800 crore, with additional projects worth Rs.38,800 crore funded through its FY25 QIP. 

Elara Capital has initiated coverage on Adani Energy Solutions with a “buy” rating, citing strong growth potential across its transmission, distribution, and smart meter divisions. The brokerage has set a target price of Rs.930 for the stock, with an upside potential of 37 percent.

The Government’s 500GW renewable energy capacity goal will require a robust transmission network to support green power evacuation, fueling an increase in bidding activity for transmission projects. Industry estimates place the near-term bidding value at Rs 84,000 crore, with AESL likely to capture 20-25 percent of the market share, according to Elara Capital.

Also read: Green energy stock crashes 9% after shareholders lock-in period ends

Distribution Sector

In the distribution sector, demand in the Mundra SEZ is expected to rise from 50MW to 5GW, which will increase the regulated asset base to Rs.1,500-2,000 crore. Meanwhile, the Mumbai operations are projected to receive annual capital expenditures ranging from Rs.1,200-1,500 crore, helping to grow the regulated equity to Rs.6,000 crore by FY27. 

AESL also holds a leading position in the smart meters market with a 17 percent share and continues to maintain a strong EBITDA margin of 85 percent. Elara Capital’s favorable rating reflects the company’s strong growth prospects and strategic positioning in key sectors.

Financial Performance

In its recent financial update for the quarter ending December 2024, NTPC Green Energy Ltd reported revenue from operations of Rs.5,830 crore, reflecting a 28 percent increase from Rs.4,563 crore in Q3 FY24. Net Profits improved by 80 percent to Rs.625 crore from Rs.348 crore in the same period. 

Ratio Analysis

The Return on Capital Employed (ROCE) of the company stands at 8.58 percent, while the Return on Equity (ROE) is 9.08 percent. 

The company’s Price-to-Earnings (P/E) ratio is 37.55, lower than its industry average of 45.46. Additionally, the company has a good current ratio of 2.77, debt-to-equity ratio of 1.86, and an Earnings Per Share (EPS) of Rs.17.83.

Written by – Siddesh S Raskar 

Disclaimer

The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post Adani Group stock to buy now for an upside potential of more than 35%; Do you own it? appeared first on Trade Brains.