Motilal Oswal initiates coverage on Adani Enterprises with Buy, sees 25% upside. Here’s why

Motilal Oswal has initiated coverage on Adani Enterprises Limited (AEL) with a Buy rating and a sum-of-the-parts-based target price of Rs 3,880, indicating a 25% upside.

Following the coverage initiation, Adani Enterprises shares traded over 1% higher. The stock rose Rs 33, or 1.06%, to Rs 3,145 on the NSE at 11:09 am, compared with the previous close of Rs 3,112. It opened at Rs 3,125 and touched an intraday high of Rs 3,159.

“The Adani Group’s flagship company is uniquely positioned to benefit from India’s next capital-expenditure cycle through its exposure to airports, roads, data centres, new energy, mining, copper and strategic manufacturing,” the brokerage firm said.


Motilal Oswal described AEL as a differentiated infrastructure incubator that combines established, cash-generating operations with newer businesses capable of driving its next phase of growth. The company’s model involves identifying emerging opportunities, building businesses to scale and subsequently monetising or demerging mature platforms.

The brokerage said that the company’s market leadership, scale, diversified portfolio and track record of incubating businesses could help it emerge as a major integrated infrastructure platform.

Three growth drivers behind the Buy rating:

1. EBITDA to double by FY29

Motilal Oswal expects AEL’s EBITDA to increase from around Rs 140 billion in FY26 to approximately Rs 299 billion by FY29, representing a compound annual growth rate of 29%.

The brokerage expects the earnings mix to shift towards higher-margin, infrastructure-led businesses. Airports, new energy and roads are projected to become the principal EBITDA growth drivers.

The commissioning of Navi Mumbai Airport, expansion of Adani New Industries Limited’s manufacturing capacity, commencement of toll collection at key road projects and higher utilisation at the copper business are expected to support this growth.

Consolidated EBITDA margins are projected to improve from 13.9% in FY26 to 15% in FY27, 15.7% in FY28 and 16.4% in FY29.

2. Earnings growth to gather pace

The brokerage firm forecasts AEL’s consolidated revenue to grow at a CAGR of around 22% between FY26 and FY29. Revenue is projected to rise from Rs 1,005 billion in FY26 to Rs 1,428 billion in FY27, Rs 1,623 billion in FY28 and Rs 1,825 billion in FY29.

Adjusted profit after tax is expected to register an 82% CAGR over FY26-29, aided by the low FY26 base, margin expansion and the increasing contribution of higher-margin businesses. Adjusted PAT is projected at Rs 66 billion in FY27, Rs 83 billion in FY28 and Rs 106 billion in FY29.

The brokerage expects airports to benefit from passenger growth, tariff revisions and higher non-aeronautical revenue. The new-energy business is expected to gain from expanding solar-module and wind-turbine capacity, while data centres and copper could become increasingly important contributors.

3. Leverage to ease as cash flow improves

AEL’s net debt-to-EBITDA ratio stood at 5.4 times in FY26 and is expected to moderate to around 4.5 times by FY29, despite continued capital expenditure.

Motilal Oswal expects AEL to generate operating cash flow of around Rs 569 billion through FY29, helping fund a portion of its expansion through internal accruals. The brokerage has assumed annual capital expenditure of approximately Rs 400 billion during the forecast period.

AEL has guided for capex of around Rs 400 billion in FY27, including approximately Rs 170 billion for airports. Motilal Oswal expects stronger operating performance and cash generation to lift return on equity to 8.5% by FY29.

Meanwhile, the stock has gained 42.65% over the past 12 months and 39.23% so far in 2026, while the benchmark has declined 2.12% and 7.49%, respectively. Adani Enterprises touched a 52-week high of Rs 3,245 on July 6, 2026, and a 52-week low of Rs 1,753 on March 30, 2026

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)