Adani Energy Solutions, Adani Power Set for over 20% Growth as Transmission and Thermal Capex Ramp Up: Jefferies

Why It Matters

The accelerated capex and secured PPAs give both Adani power entities clear earnings visibility and stronger balance‑sheet metrics, positioning them to capture India’s rising baseload and transmission demand.

Key Takeaways

• AESL executing ₹718 bn (~$8.6 bn) transmission projects, 20% YoY rise.
• Smart‑meter installations hit 11.4 m, targeting 100 m for government goal.
• Jefferies forecasts 27% EBITDA CAGR for AESL FY26‑30, outpacing Power Grid.
• Adani Power aims 42 GW capacity by FY32, 56% already under PPAs.
• Both firms projected >20% EBITDA growth, leverage improving to ~2× by FY30.

Pulse Analysis

India’s power sector is entering a decisive expansion phase, driven by rapid industrialization, urbanization, and a push for reliable baseload supply. Transmission networks, historically under‑invested, are now a focal point for private players as the government’s ambitious 250 million smart‑meter rollout creates a parallel demand for grid modernization. In this environment, Adani Energy Solutions stands out as the only listed private pure‑play transmission operator, leveraging a robust order book and a strategic focus on smart‑meter deployment to capture both revenue streams.

AESL’s pipeline of ₹1.5 trillion (≈$18 bn) reflects a 2.6‑fold increase in gross transmission assets by FY30, while its smart‑meter portfolio has surged to 11.4 million units, well ahead of the 7 million target. The company’s net‑debt‑to‑equity ratio of 1.8× after a $1 bn qualified institutional placement provides ample headroom to fund the projected ₹305 bn (≈$3.7 bn) smart‑meter block without breaching a 3× leverage ceiling. Jefferies’ 27% EBITDA CAGR outlook underscores the profitability edge AESL enjoys over state‑run peers, making its valuation—now at 133% of PGCIL—more attractive for growth‑oriented investors.

Adani Power complements the transmission story with a bold thermal expansion, targeting 42 GW capacity by FY32, of which more than half is already under long‑term PPAs at tariffs of ₹5.8‑6.3 per unit. The firm’s 23% EBITDA CAGR projection and a trajectory toward free‑cash‑flow positivity by FY30 signal a solid cash‑generating platform despite capital‑intensive growth. With leverage expected to fall to around 2× by FY30, the combined momentum of AESL’s grid upgrades and APL’s baseload capacity positions the Adani power vertical to benefit from India’s energy demand surge, offering investors a compelling blend of growth, earnings visibility, and improving financial health.