The domestic brokerage house Motilal Oswal has initiated coverage on Adani Enterprises (AEL), with a target price of Rs 3,880. That implies about 25% upside potential from current market price. It also rated the stock ‘Buy’.
From airports and roads to renewable energy, data centres, copper and strategic manufacturing, the company is building exposure to several areas expected to see higher investment in the coming years.
What is behind this target and more importantly, which businesses could drive Adani Enterprises’ earnings over the next three years?
Let’s take a look at what the brokerage house is saying and the rationale behind it –
Adani Enterprises: A bet on India’s next capex cycle
As per the brokerage house Motilal Oswal report, Adani Enterprises is positioned across several long-term investment themes. This includes transport infrastructure, energy transition, digitalisation and domestic manufacturing.
Motilal Oswal describes the company as an infrastructure incubator. Adani Enterprises builds new businesses, scales them up and eventually creates value from mature businesses while continuing to invest in newer opportunities.
The brokerage said, “We view AEL as a differentiated infrastructure incubator, combining established businesses that provide stability with high-growth platforms that can drive the next leg of earnings.”
Airports could become a major earnings driver
Airports are one of the key businesses that Motilal Oswal expects to support earnings growth.
Adani Enterprises has an eight-airport portfolio. Passenger traffic across these airports could increase from around 96 million in FY26 to nearly 119 million by FY29.
There is also another opportunity. Non-aeronautical revenue, which comes from activities such as retail, food and commercial services, remains below global benchmarks.
The brokerage expects the airport business to deliver a 24% compound annual growth rate (CAGR) in EBITDA between FY26-29.
Green energy: Can Adani New Industries scale up?
Another important piece is Adani New Industries, which is focused on clean-energy manufacturing.
Its manufacturing chain covers polysilicon, wafers, solar cells and modules, along with wind-turbine manufacturing.
Solar cell and module capacity is expected to increase from 4 gigawatts currently to 10 gigawatts by FY27.
According to Motilal Oswal report, domestic-content requirements and growing demand for locally manufactured renewable-energy equipment could support this business.
The brokerage forecasts 13% EBITDA CAGR for Adani New Industries between FY26-29.
Data centres: Could this become the biggest growth catalyst?
Motilal Oswal expects strong expansion in this business as demand for computing capacity rises, particularly with the growth of artificial intelligence and machine learning.
Adani Enterprises’ data-centre capacity stood at just 55 megawatts in FY26. The company is targeting 3 gigawatts by 2030.
The brokerage said, “We see data centers as one of the highest-growth businesses within AEL’s portfolio and a potentially meaningful contributor to consolidated earnings over the medium term.”
The business is also targeting an EBITDA margin of more than 70%.
Copper and manufacturing add another growth layer
Adani Enterprises is expanding into copper, polyvinyl chloride (PVC), mining and other strategic manufacturing activities.
Motilal Oswal estimates EBITDA across the primary-industry segment could grow at a 47% CAGR during FY26-FY29. This is driven largely by copper.
Earnings could accelerate sharply
The brokerage expects Adani Enterprises’ revenue to grow at around 22% CAGR between FY26-29. EBITDA could grow at around 29% CAGR, reaching nearly Rs 29,900 crore in FY29 from about Rs 14,000 crore in FY26.
Motilal Oswal expects the commissioning of Navi Mumbai Airport, Adani New Industries’ capacity expansion, road assets beginning toll collection and growth in primary industries to support this earnings acceleration.
The brokerage said, “Adani Enterprises is entering a phase of accelerated earnings growth.”
What investors need to watch
The growth outlook comes with risks. Execution delays, higher-than-expected capital expenditure, regulatory changes, commodity-price volatility and slower-than-expected ramp-up of new businesses could affect the estimates.
However, Motilal Oswal believes the combination of infrastructure, manufacturing, energy transition and digital businesses provides multiple avenues for growth.
Disclaimer: This article is based on research reports from one or more brokerage firms and is for informational purposes only. The views, target prices, and recommendations expressed are those of the respective brokerage firms and do not reflect the official policy or position of Financial Express. This should not be construed as an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor before making any investment decisions.