Adani Energy Solutions is among the select utilities on Jefferies’ radar. According to the brokerage, the stock is positioned for sustained earnings growth over the next three years.
The company’s September quarter performance was largely in line with expectations, but transmission margins came in stronger, helping lift overall profitability.
Jefferies on Adani Energy– Operational performance improves
Jefferies on Adani Energy Solutions: Capex guidance unchanged
Management maintained its FY26 capex guidance at Rs 1.6–1.8 lakh crore, with Rs 60,000 crore already spent in the first half of the year.
It also reaffirmed its Rs 1.5 lakh crore transmission capitalization target, broadly in line with execution schedules.
Jefferies said continued capex discipline and the gradual completion of high-value projects will support the company’s 30% EBITDA growth outlook.
“FY26E capex guidance remains largely unchanged, and execution progress stays on track,” the report said.
Financials strong; profitability improving
AESL’s adjusted PAT rose to Rs 5,340 crore in Q2FY26 from Rs 3,610 crore a year earlier, marking a 48% increase.
Revenue from the transmission segment grew 3% year-on-year to Rs 2,372 crore, contributing 36% of total revenue and 68% of EBITDA.
The company’s consolidated EBITDA margin improved to 29.6%, while net profit margin climbed to 8.1% from 5.8% a year ago.
Jefferies said the results indicated stronger cost control and project execution efficiency, particularly in transmission.
Jefferies expects AESL’s revenue to grow 33% in FY26, followed by 12–15% annually over FY27–28.
EBITDA is projected to rise from Rs 69,400 crore in FY25 to Rs 92,700 crore in FY26 and Rs 1.52 lakh crore by FY28, implying a 30% compound annual growth rate.
Jefferies’ outlook: Robust medium-term growth ahead
Net profit is estimated to increase to Rs 26,200 crore in FY26 from Rs 15,800 crore in FY25, and further to Rs 37,600 crore by FY28.
Return on equity is expected to improve to 12.4% in FY28 from 9.1% in FY25, indicating scale benefits from transmission and smart metering growth.
Jefferies on Adani Energy Solutions: Valuation and upside potential
Jefferies retained its ‘Buy’ rating with a target price of Rs 1,100, based on 15x EV/EBITDA (FY27 estimates).
This compares with an implied 10x multiple for Power Grid Corporation, which Jefferies also rates Buy, but with slower earnings growth of around 7% CAGR.
The brokerage said the premium valuation is justified given AESL’s faster growth trajectory and broader exposure to smart metering and distribution reforms.
In its upside scenario, Jefferies values the stock at Rs 1,325 (17x EV/EBITDA), while the downside case is pegged at Rs 650, assuming project delays or lower market share.
Sector view: utilities poised for expansion
Jefferies said India’s power transmission and distribution sector is entering a high-capex phase, supported by the Distribution Amendment Act and continued policy focus on grid modernization.
Adani Energy, with its large-scale execution capability and balance-sheet strength, is among the key beneficiaries of rising investment in grid resilience, Jefferies noted.
The brokerage added that the company’s sustainability initiatives, including a target to source 50% renewable power for its Mumbai distribution business by FY25, align well with long-term energy transition goals.
Why Jefferies remains positive
“Adani Energy Solutions has re-established its execution edge in transmission and is scaling up its smart metering operations faster than expected,” Jefferies said.
The brokerage cited improving spreads, consistent project wins, and controlled leverage as reasons for staying constructive on the stock.
“Buy for strong medium-term growth,” the report concluded, noting that AESL’s combination of project visibility and earnings scale-up makes it one of the most compelling utility plays in India’s infrastructure expansion cycle.
