Adani Enterprises: Morgan Stanley sees 23% upside in 2026

What Morgan Stanley said, and why it matters

Morgan Stanley has initiated coverage on Adani Enterprises Ltd (AEL) with an Overweight rating, calling it the Adani stock best positioned to benefit from India’s multi-year infrastructure and capex cycle. The brokerage linked the call to exposure across airports, roads, digital infrastructure, and new energy. It assigned a target price of ₹3,638 per share. Morgan Stanley said this implies a 23% upside from the previous close, and elsewhere described the upside as nearly 19% from current levels.

The coverage note also reinforced Morgan Stanley’s preference for contracted, spread-led cash flows compared with merchant-linked volatility. That theme was repeated in its commentary on Adani Power Ltd (APL), where it maintained an Overweight view while revising targets upward in different scenarios and notes.

Market reaction in Adani Enterprises on June 24

Following the initiation, Adani Enterprises shares rose as much as 3.7% in intraday trade on June 24. The stock closed 3.55% higher at ₹3,068. The move came alongside broader attention on Adani group companies after Gautam Adani outlined expansion plans at the group’s AGM, according to the provided report summary.

Morgan Stanley’s target of ₹3,638 sits well above the June 24 close of ₹3,068, keeping the focus on whether the company’s incubator-led model can continue scaling across multiple verticals.

“India’s premier incubator” and the capital recycling model

Morgan Stanley described Adani Enterprises as “India’s premier incubator.” The brokerage linked this view to AEL’s long operating history as a platform that builds businesses, scales them, and then monetises and recycles capital. It cited a 30% market-cap CAGR since AEL’s 1994 IPO.

The report framed AEL’s strategy as a cycle of “incubation → scale → monetisation → capital recycling.” In practical terms, Morgan Stanley’s thesis relies on multiple business verticals being valued separately and then aggregated through a sum-of-the-parts approach.

FY26-FY30 growth forecasts for AEL

Morgan Stanley forecast revenue and EBITDA CAGRs of 19% and 32%, respectively, over FY26–FY30. It expects EBITDA to rise about three times over the period, from ₹14,000 crore in FY26 to about ₹42,300 crore by FY30.

The report attributed the expected expansion to airports, new energy and primary industries, and also flagged rapid scaling in the company’s data centre joint venture. While the note did not provide separate segment EBITDA numbers in the provided text, it clearly identified these verticals as key contributors to the FY30 outcome.

How Morgan Stanley built the ₹3,638 target for AEL

Morgan Stanley said its ₹3,638 price target is derived from a sum-of-the-parts valuation. It used EV/EBITDA multiples for each vertical and discounted the values back to FY28. The report listed the verticals considered as airports, data centres, new energy, IRM/mining, copper, PVC, roads and others.

This approach matters because the stock’s valuation is tied to how investors price each business line rather than a single consolidated multiple. In Morgan Stanley’s framing, the mix of infrastructure-linked and digital/new energy assets supports a differentiated valuation structure.

Adani Power: targets raised and an Overweight stance reiterated

Across multiple notes referenced in the provided text, Morgan Stanley reiterated its Overweight rating on Adani Power and raised its base case target price to ₹185 per share from ₹163.60 after the company’s Q2 performance and recent PPA wins. Separately, it also referenced a higher target revision to ₹275 from ₹173, describing the group’s utility incremental businesses as lower-risk and more return-accretive.

The brokerage emphasised a transition in APL’s earnings mix. It said APL is moving away from a model driven by plant load factor on PPAs with merchant upside to one based on annuity returns on PPAs with stronger spreads, and smaller merchant exposure.

What the report says about capacity, PPAs and unit economics

Morgan Stanley said most of APL’s 24 GW under-construction capacity should generate annuity returns, with EBITDA of ₹3.5 per kWh and fuel pass-through. It also cited strong progress on long-term power purchase agreements, a healthy tender pipeline, and planned capacity additions as supportive of earnings visibility over the medium term.

In another update included in the provided text, Morgan Stanley projected APL’s market share reaching 15% by FY32, supported by a 41.9 GW portfolio described as 2.5 times FY25 levels. And in a separate brokerage-style estimate included in the source material, operational capacity was expected to reach 39.5 GW by FY32 and EBITDA per MW to increase from ₹1.3 crore/MW in FY25 to ₹1.8 crore/MW by FY32.

Valuation and growth metrics highlighted for Adani Power

Morgan Stanley said it now values APL at 14 times FY32e EV/EBITDA, above Indian and global peers at 12 times. It attributed the premium to a lower-risk PPA profile, stronger growth, and improving RoCE.

On growth, different parts of the provided text cite EBITDA CAGR forecasts of 20% over FY25–FY33, 23% over FY26–FY32E, and 24% over FY26–FY32E. The common message is that Morgan Stanley sees APL’s growth tracking above peers, with one note comparing it against peers at 16% and stating it is more than twice NTPC’s growth.

Key numbers at a glance

Market impact and what investors are watching

For AEL, the immediate market impact in the provided text was the June 24 jump, with the stock closing at ₹3,068 after an intraday rise of up to 3.7%. For APL, the provided text also notes that at about 12:15 pm on one day, the shares were trading at ₹155, down 2.4% from the last close on the NSE, even as the brokerage maintained a positive thesis.

The core analytical thread across both stocks is visibility of cash flows. Morgan Stanley repeatedly highlighted PPAs, spread strength, and the move toward annuity-like returns for APL, while positioning AEL as a multi-vertical platform geared to India’s capex cycle.

Conclusion

Morgan Stanley’s initiation on Adani Enterprises with an Overweight rating and a ₹3,638 target puts the spotlight on AEL’s incubator model and its multi-sector exposure across infrastructure, digital, and new energy. Its continued Overweight stance on Adani Power, along with target revisions and forecasts tied to PPAs and under-construction capacity, reinforces the preference for contracted earnings. The next set of confirmed updates investors will track includes progress on commissioning timelines, PPA additions, and execution across the verticals cited in Morgan Stanley’s sum-of-the-parts framework.