Brokerage house Cantor has initiated coverage on the company with an ‘Overweight’ rating and price target of Rs 2,251, implying an 129% upside on FY26 basis.
Cantor forecasted that company revenue would grow at a CAGR of 20% from FY24 to FY27E and the adjusted EBITDA would grow at a CAGR of 28.8%.
The brokerage has used relative valuation to value Adani Energy, with peers trading at an average CY25/FY26E EV/EBITDA multiple of 10.9x, which compares to the company that is trading at 12.8x.
On a growth adjusted basis, Cantor came up with a target price of Rs 2,251 being based on a 26.5x FY26 EV/EBITDA multiple.
“The transmission business will see strong growth as it completes the nine projects it has recently been awarded over the next 18-24 months. Distribution business should be able to grow at/near double-digit rates as it continues to add to its regulatory asset base,” the brokerage said.The company reported a consolidated net loss at Rs 824 crore for the quarter ended June 2024 as against Rs 175 crore net profit a year ago. Meanwhile, revenue from operations were up 47% to Rs 5,379 crore.”Adani Energy is more expensive on a multiple basis, but is also growing meaningfully faster than its peers. Secondly, we believe AESL is a more diversified business,” Cantor noted.
Following a recent capital raise, Adani Energy is now well-funded to drive growth across all major segments.
“Ultimately, we believe shares are attractive at current levels. On a growth-adjusted basis, shares currently trade at a 60% discount to peers, when in our view, it should trade at an in-line multiple,” it said.
