NEW DELHI New Delhi: Adani Group's power transmission utility Adani Energy Solutions Ltd is valued at USD 18.5 billion at the enterprise level and strong business growth is expected to drive 29 per cent compounded profit before tax growth over the next three years, a report said. AESL has a diversified portfolio that includes transmission assets, distribution assets and a smart metering business.
Global brokerage Cantor Fitzgerald initiated coverage of the company, saying, “With an enterprise value of $18.5 billion, we believe AESL is a very attractive way to play the fast-growing energy markets in India.”
It believes AESL delivers growth unlike any other publicly traded utility/energy company in the US, Europe or Asia. “We estimate total revenue to grow at a CAGR of 20 per cent from FY24 to FY27 and adjusted EBITDA to grow at a CAGR of 28.8 per cent.” In comparison, other companies have revenue growing in low single digits and EBITDA in mid single digits. Stating that it is growing meaningfully faster than its peers, the brokerage said it believes AESL is a more diversified business.
“We expect strong growth in its transmission business as it completes its nine recently awarded projects over the next 18-24 months (and we expect it to win more contracts in the coming years), its distribution business should be able to grow at/near double-digit rates as it continues to add to its regulatory asset base (RAB), and its smart metering business is about to start generating meaningful revenues/profits as it works through its 22.8 million smart meter backlog (to generate $3.2 billion in revenue), and it may win another 40 million smart meters (which would add over $6 billion in revenue),” it said.
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