Buy Adani Energy Solutions, target price Rs 930: Elara Capital

Elara Capital has a buy call on Adani Energy Solutions with a target price of Rs 930. The current market price of Adani Energy Solutions is Rs 661.85. Adani Energy Solutions, incorporated in 2013, is a Large Cap company with a market cap of Rs 79500.89 crore, operating in the Power sector.

Adani Energy Solutions' key products/revenue segments include Traded Goods, Sale of services and Income From Construction Work for the year ending 31-Mar-2024.



Financials
For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 6000.39 crore, down -5.65% from last quarter Total Income of Rs 6359.80 crore and up 24.38% from last year same quarter Total Income of Rs 4824.42 crore. The company has reported net profit after tax of Rs 625.30 crore in latest quarter.

The company?s top management includes Mr.Gautam S Adani, Mr.Anil Sardana, Mr.Rajesh S Adani, Mr.K Jairaj, Mrs.Meera Shankar, Dr.Ravindra H Dholakia, Mrs.Lisa Caroline MacCallum. Company has Walker Chandiok & Co as its auditors. As on 31-12-2024, the company has a total of 120 crore shares outstanding.

Investment Rationale
Elara Capital has initiated coverage on Adani Energy Solution with a Buy rating and a SOTP-based target price of Rs 930. The valuation assumes regulated transmission assets at 2.5x FY27E P/BV, TBCB transmission projects at 14.0x FY27E EV/EBITDA, distribution assets at 2.5x FY27E P/BV, and smart meters at 12.0x FY27E EV/EBITDA. Additionally, we attribute an option value of INR 196 per share for its upcoming smart meter projects and Rs 156 per share for the new transmission projects under National electricity plan. (NEP) opportunity. The brokerage expects an EBITDA CAGR of 26% and an EPS CAGR of 29% during FY24-27E. Key risks include increased competition and the need for timely project execution.

Promoter/FII Holdings
Promoters held 69.94 per cent stake in the company as of 31-Dec-2024, while FIIs owned 17.34 per cent, DIIs 5.85 per cent.