Jefferies cuts AESL target to Rs 1,170, keeps Buy call

What changed in Jefferies’ view

Jefferies adjusted its price target on Adani Energy Solutions (AESL) to Rs 1,170 from Rs 1,215, while maintaining its ‘Buy’ rating, according to the update referenced in the cited market note. The same compilation of brokerage commentary also carries other Jefferies targets for AESL, including Rs 1,100 and Rs 1,150, reflecting that different notes and timeframes were discussed together. Across these references, the consistent message is that Jefferies remains positive on AESL’s medium-term growth profile. The brokerage case is tied to execution in transmission projects, improving operating performance, and a multi-year capital expenditure plan that has not been changed in the cited commentary.

Why the brokerage remains constructive on AESL

Jefferies expects sustained earnings growth over the next three years, supported by improving operational performance and project execution in transmission. It projected a 30% compound annual growth rate (CAGR) in EBITDA over that period and flagged a “significant” increase in net profit, without specifying an absolute net profit figure in the provided text. The note also said AESL’s quarterly performance showed improved profitability, with transmission margins exceeding expectations. Consolidated EBITDA margins were stated at 29.6%, attributed to better cost control and execution efficiency.

Capex guidance and investment progress

The cited Jefferies commentary said AESL’s FY26 capital expenditure guidance remains unchanged at Rs 160,000 to Rs 180,000 crore. It also stated that Rs 60,000 crore has already been invested. A transmission capitalisation target of Rs 150,000 crore was described as being on track. These figures are central to the investment narrative because they link execution momentum to expected earnings visibility.

Transmission order book and project pipeline

In another Jefferies note referenced in the text, AESL was described as having Rs 61,600 crore of transmission projects on hand, stated as 3.6 times higher year-on-year. Jefferies also said distribution growth is steady in Mumbai, while Mundra has potential to offer upside. Smart meters were flagged as seeing progress in commissioning and positioned as a key growth driver. While the compilation contains multiple angles, the common thread is that project additions and commissioning pace are being monitored as the drivers of delivery.

Valuation framework used by Jefferies

Jefferies’ valuation approach in the cited coverage included a target multiple of 15 times EV/EBITDA for FY27E for AESL. It compared this with an implied 10 times target EV/EBITDA multiple for Power Grid Corp. (PGCIL), arguing the premium is supported by higher growth for AESL. Jefferies also wrote that AESL’s premium to PGCIL has reduced to 50% versus 991% in January 2023, and that the stock’s valuation is at a 79% discount to its January 2023 peak one-year forward EV/EBITDA.

Medium-term operating metrics highlighted

For FY25-27E, Jefferies expected AESL to deliver 34% EBITDA CAGR and 57% EPS CAGR, driven by the execution of its transmission portfolio and smart meter installations. It also said that medium term, EBITDA should rise 2.9 times in FY25-30E, compared with 1.5 times for Power Grid over the same period in its framing. On balance sheet metrics, Jefferies noted a view that net debt-to-equity should remain within 2 times after executing existing plans. It added that Rs 8,500 crore borrowed to purchase the Mumbai distribution circle in 2018 is gradually being paid off through cash flows.

Adani Power also drew bullish brokerage notes

The same article bundle also discussed upbeat brokerage commentary on Adani Power Limited (APL) after its September quarter (Q2 FY26) operational performance. Morgan Stanley reiterated ‘Overweight’ with a price target of Rs 163.60, implying a 1% upside from the October 30 close of Rs 162.57, and cited a strong execution pipeline and healthy receivables. Jefferies retained a ‘Buy’ and raised its price target for APL to Rs 195 from Rs 138, implying 20% upside, and argued APL deserves a valuation premium to NTPC due to higher margins and growth rates. Cantor Fitzgerald also maintained ‘Overweight’ and raised its price target by 32% to Rs 184, citing expanding power purchase agreements (PPAs) and earnings visibility.

APL operational pipeline and quarterly financial snapshot

APL’s earnings call commentary, as quoted in the text, stated that the new PPA bidding pipeline is around 22 GW, with 14.5 GW already awarded. It also said APL is L1 in a 3.2 GW Assam thermal bid, and that bids for Rajasthan (3.2 GW) and Uttarakhand (1.3 GW) are in progress. For the quarter, consolidated revenue was reported at Rs 13,106 crore and EBITDA at Rs 6,001 crore, alongside a 7.4% increase in power sale volumes despite monsoon-related disruptions. Management reiterated a goal to expand total capacity to 42 GW by 2031-32 and stated that equipment ordering and land for the 23.7 GW expansion have been arranged, with implementation “progressing rapidly,” as per the CEO comment cited.

Market context and investor takeaway

For AESL, the repeated ‘Buy’ stance across the Jefferies references links directly to India’s transmission and distribution expansion theme and to company-specific execution on a growing project base. For APL, the focus is on PPAs and capacity addition visibility. The compilation also referenced broader market attention on Adani group stocks after SEBI gave Gautam Adani a clean chit in the Hindenburg case, and said the group added over Rs 100,000 crore in market value in two sessions, though it did not provide stock-by-stock breakups in the provided text.

Key numbers mentioned

Conclusion

Jefferies’ AESL updates in the cited material show a continued positive rating alongside shifting target prices, with the core argument anchored in transmission execution, capex visibility and medium-term earnings growth expectations. Alongside AESL, the same collection of notes highlighted broker optimism on Adani Power’s PPAs, pipeline and capacity plan to 42 GW by 2031-32. The next set of data points investors will watch, based on what is cited, are transmission project execution milestones, smart meter commissioning progress and delivery against stated capex and capitalisation targets.