JM Financial initiates coverage on Adani Energy with 'Buy', sees 23% upside
JM Financial assigned a 'Buy' rating on Adani Energy and a target price of ₹1,199, an upside of 23 per cent from Monday's closing price
 "JM Financial initiates coverage on Adani Energy with 'Buy', sees 23% upside")
JM Financial has initiated coverage on Adani Energy Solutions Ltd., citing strong positioning in the transmission and distribution (T&D) growth story and expanding opportunities in smart metering.
The brokerage assigned a 'Buy' rating and a target price of ₹1,199, an upside of 23 per cent from Monday's closing price.
The brokerage said Adani Energy is well-positioned to benefit from sustained investments in power infrastructure, backed by a robust ₹77,800 crore transmission order book, which represents a 28 per cent market share. It also highlighted the company’s 24.6 million smart metering portfolio and a stable distribution franchise with a regulated asset base (RAB) of ₹9,600 crore.
JM Financial expects revenue (excluding service concession arrangements), Ebitda and profit after tax to compound at 19 per cent, 15 per cent and 50 per cent, respectively, over financial year 2025 to financial year 2028 estimates. Growth is likely to be driven by project commissioning and scale-up in the smart metering segment, it said.
The Adani Group company operates as an integrated power transmission and distribution platform with a growing presence in smart metering and allied energy solutions. The company has a footprint across 16 states, with a cumulative transmission network of 27,901 circuit kilometres and 118,175 MVA of transformation capacity, JM Financial noted.
In the distribution segment, Adani Energy serves 3.3 million customers, covering over 13 million beneficiaries in Mumbai, and also operates a distribution business in the Mundra Special Economic Zone, catering primarily to industrial consumers.
The brokerage noted that Adani Energy entered the smart metering segment in the financial year 2023 and has since secured orders for 24.6 million meters, accounting for around 20 per cent of India’s smart metering opportunity. This business is expected to complement the company’s T&D portfolio, enhance long-term cash flow visibility and strengthen its role in India’s grid expansion and energy transition.
JM Financial also pointed to a large opportunity pipeline of ₹4.86 trillion in transmission, with projects worth ₹1.3 trillion currently under execution. It expects transmission revenue (excluding service concession arrangements) to nearly double from ₹4,700 crore in FY25 to ₹9,300 crore by FY28 estimates, supported by industry-leading Ebitda margins of 90-92 per cent.
Key risks flagged by the brokerage include elevated leverage, foreign currency exposure, regulatory uncertainties and potential shortages of transmission equipment.
Adani Energy share price history
Shares of Adani Energy fell for the third straight session on Wednesday amid a broader fall in stock markets on geopolitical tensions. The counter has fallen 6.7 per cent this year, compared to a 6.6 per cent decline in the benchmark Nifty 50. Adani Energy has a total market capitalisation of ₹1.15 trillion.
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