8 hrs ago
Jefferies sees 46% upside in Adani stock, targets AGEL, Power
Jefferies is a financial company that studies stocks.
It believes Adani Energy Solutions could rise by 46%.
The company is expected to sell more of its electricity through fixed customer agreements.
Jefferies said this could make its earnings more predictable.
Electricity prices in the merchant market have also increased recently.
Higher prices could help the company earn more than expected in the second quarter.
Jefferies also rated Adani Green Energy and Adani Power as Buy stocks.
However, it warned that interest-rate problems and losing market share could hurt Adani Energy Solutions.
Jefferies sees 46% upside potential in Adani Energy Solutions and maintains a positive view on the stock.
The brokerage said tied-up trading volumes could reach 57% in FY28E, compared with 20% at the end of Q1 FY27.
Average merchant prices in Q2 FY27 to date rose 48% year over year and 14% quarter over quarter to Rs 5.8 per unit.
Jefferies gave Buy ratings to Adani Green Energy and Adani Power, with target prices of Rs 1,328 and Rs 215, respectively.
The brokerage identified difficulties maintaining interest rates and market-share losses as downside risks for Adani Energy Solutions.
- Who
- Jefferies, Adani Energy Solutions, Adani Green Energy, and Adani Power.
- What
- Jefferies assessed upside potential for Adani Energy Solutions and issued Buy ratings and target prices for Adani Green Energy and Adani Power.
- Where
- The article discusses the companies’ Indian stock-market outlook and electricity-trading operations.
- When
- The assessment refers to Q2 FY27, FY27E, FY28E, and the first week of September 2026.
- Why
- Jefferies expects more tied-up trading volumes and higher merchant prices to support earnings, while identifying interest-rate and market-share risks.
Jefferies’ bullish case
Risks and uncertainties
Trading business outlook
Jefferies’ bullish case
Increasing consumer-side tie-ups could reduce volatility, make earnings more sustainable, and support a re-rating of the trading segment.
Risks and uncertainties
The trading business remains volatile, and Jefferies values it at a lower multiple than the ex-trading business.
Electricity prices
Jefferies’ bullish case
Higher merchant prices, including Rs 7.5 per unit in the first week of September 2026, could create a positive earnings surprise.
Risks and uncertainties
Jefferies’ current Q2 FY27E realisation estimate is down 19% quarter over quarter, creating uncertainty around actual performance.
Business risks
Jefferies’ bullish case
Jefferies expects the company’s management to eventually tie up most of its capacity on the consumer side.
Risks and uncertainties
The brokerage warned that inability to maintain interest rates and market-share losses could weigh on Adani Energy Solutions.
Key facts
- Adani Energy Solutions upside
- Jefferies sees 46% upside potential.
- Trading volumes
- Tied-up volumes are projected at 57% in FY28E, versus 20% at the end of Q1 FY27.
- Merchant price
- Q2 FY27 average merchant prices to date were Rs 5.8 per unit.
- Price movement
- Merchant prices rose 48% year over year and 14% quarter over quarter.
- Adani Green Energy target
- Jefferies assigned a Buy rating and a target price of Rs 1,328.
- Adani Power target
- Jefferies assigned a Buy rating and a target price of Rs 215.
- Key risks
- Jefferies flagged difficulty maintaining interest rates and market-share loss for Adani Energy Solutions.
Quotes
Jefferies
Brokerage providing analysis and investment ratings on Adani group companies
“Average merchant prices in Q2 FY27 till date is up 48 per cent YoY and 14 per cent QoQ to Rs 5.8/unit with the first week of Sept 2026 seeing a peak of Rs 7.5/unit. Our Q2 FY27E realisation for the trading business is down 19 per cent QoQ and could see upside surprise. Every 5 per cent change in realisation adds 3% per cent to our FY27E EBITDA.”
businesstoday.in
“This increases the tied-up volumes of the trading segment to 57 per cent in FY28E vs 20 per cent at the end of Q1 FY27, making EBITDA profile more sustainable. Merchant prices have also been higher during Q2 FY27 till date, which could mean some positive surprise potential in the trading segment in 2Q also.”
businesstoday.in
Sources
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