Adani Energy Solutions Ltd. can witness a rally of 130% on the back of strong growth and diversified business. This is the statement of Cantor Fitzgerald, in its latest report the research firm has initiated coverage of Adani Energy Solutions with an overweight rating and has set a target price of Rs 2,251 per share as against the previous closing price of Rs 979.45 on BSE.
‘The company’s revenue will grow at 20% CAGR’
Kantar said in a report on September 19 that a diversified portfolio that includes transmission assets, distribution assets and smart metering business could be an attractive way to play in the fast-growing energy market. The report said that Adani Energy Solutions could show different growth from any listed company and energy company in the US, Europe or Asia. The research firm estimated that the company’s revenue would grow at a CAGR of 20% from FY2024 to 2027.
The Kantar note said the transmission business is well-poised for strong growth as it has completed nine recently awarded projects. The distribution business should grow in double digits, the report expects. The smart metering business is set to generate meaningful revenue/profit as it works through its 22.8 million smart meter backlog and is expected to win another 40 million smart meters.
Kantar has said in this report that Adani Energy Solutions will remain ahead of its competitors for at least the next decade. This is a result of India still being less developed compared to other mature markets. The note says that Adani Energy shares are trading at a 60% discount to existing peer companies. And it should trade at in-line multiples.
Apart from Kantor, Jefferies says that power distribution is preparing to take advantage of the rapidly growing smart metering market in India, with the government aiming to install 250 million smart meters by 2026. Jefferies has a BUY rating on the stock, with a target price of Rs 1,365 per share, which is a 38% gain.
According to Bloomberg data, all three analysts tracking the company have a ‘BUY’ rating on the stock.
