Adani Energy Solutions, Adani Power Set for over 20% growth as transmission and thermal capex ramp up: Jefferies

New Delhi [India], June 7 : Adani Group's power plays are entering a multi-year growth phase as India's transmission and baseload power demand tailwinds. Jefferies' management meet notes for Adani Energy Solutions Ltd and Adani Power Ltd, dated June 5, 2026, highlight robust bid pipelines, locked-in PPAs, and improving financial metrics that support double-digit medium-term growth.
Adani Energy Solutions, India's only listed private pure-play on transmission and distribution, is executing transmission projects worth Rs 718 billion, up 20% YoY, against a near-term bid pipeline of Rs 1.5 trillion vs Rs 540 billion at end-FY25. Jefferies expects AESL to deliver 27% EBITDA CAGR and 19% PAT CAGR over FY26-30E, growing 2x+ faster than Power Grid's 13% EBITDA and 8% PAT CAGR for the same period. AESL's premium to PGCIL has compressed to 133% from 991% in Jan 2023, making valuations relatively attractive as execution sustains.
Smart meters are the other key driver. AESL installed 11.4 million meters by end-FY26 vs 3.1 million YoY, beating its 7 million target. With 100 million meters still to be bid out of the government's 250 million target, AESL is executing projects worth Rs 295 billion or 24.6 million meters. Jefferies models a ramp to 11 million meters by FY27-29E, requiring wins of another 19 million in the next 12-18 months from tenders in Karnataka, Tamil Nadu, Telangana, MP, Gujarat and Andhra Pradesh. Early-stage C&I and cooling solutions, especially for data centres, add long-term optionality.
Balance sheet strength supports growth. Net debt-to-equity was 1.8x as of March 2026 after a $1 billion QIP in Aug 2024. AESL can expand transmission gross block 2.6x by FY30E and smart meter block to Rs 305 billion from Rs 64 billion without breaching 3x leverage. ROE should move toward 13% by FY30E as interest costs fall and commissioned assets add EBITDA.
Adani Power reiterated its target to expand capacity 2.3x to 42 GW by FY32. Thermal remains critical for India's baseload, and 56% of the upcoming 23.7 GW is already under long-term PPAs, with the aim to tie up 100%. PPA tariffs are improving -- recent 8 GW signed Aug 2025-Mar 2026 with Bihar, MP, Assam, Uttarakhand and Tamil Nadu SEBs at Rs 5.8-6.3/unit vs Rs 5.4/unit for Raipur in Sept 2024.
Jefferies models 23% EBITDA CAGR for APL over FY26-30E and expects it to turn free cash flow positive by FY30E as capacity hits 31 GW. Operating cash flow should grow 20% CAGR, keeping leverage at 0.7x despite capex. Net debt/EBITDA will peak at 3.4x in FY27E before falling to 2x by FY30E, among the lowest in the sector. Capacity rose 33% to 18.3 GW by May 2026, with land and equipment for 42 GW already secured from L&T and BHEL. 6.9 GW should be operational by FY29E, underpinning 20%+ EBITDA growth visibility.
Together, AESL's transmission and smart meter execution and APL's PPA-backed thermal expansion give Adani's power vertical clear earnings visibility through FY30.