New Delhi : Adani Energy Solutions Ltd, part of the Adani group, is worth USD 18.5 billion and is expected to achieve a 29 pc growth in pre-tax profits over the next three years, according to a report. AESL has a varied range of investments which consist of transmission assets, distribution assets, and a smart metering business. Global brokerage Cantor Fitzgerald has started covering the company AESL, stating it is a highly appealing opportunity to participate in India's growing energy markets with an enterprise value of USD 18.5 billion.
AESL is believed to provide unrivaled growth compared to any other utility or energy company that is publicly traded in the US, Europe, or Asia. Our prediction is that total revenue will increase by a compound annual growth rate of 20 per cent from fiscal year 2024 to fiscal year 2027, while adjusted EBITDA is expected to grow at a compound annual growth rate of 28.8 per cent. This is in contrast to competitors experiencing revenue growth in low single digits and EBITDA growth in mid-single digits. The brokerage claimed AESL is growing significantly faster than other companies and is considered a more diversified business.
"We anticipate that its transmission sector will experience significant growth due to the completion of nine recently awarded projects in the next 18-24 months (with more contracts expected in the future). The distribution sector is projected to grow at or near double-digit rates by increasing its regulatory asset base (RAB), while the smart metering division is on the verge of generating substantial revenue from reducing its backlog of 22.8 million smart meters (resulting in USD 3.2 billion in income) and potentially winning an additional 40 million smart meters (which could add over USD 6 billion in revenue)," the statement noted.
The company's operations are connected to India's increased demand for electrical infrastructure. India has a population of 1.4 billion people, making it the most populous country globally. It was stated that India is still in the early stages of its energy demand as a nation. As an increasing number of households are connected to the electricity grid, earning potential grows and these households are equipped with more electricity-consuming appliances like refrigerators and air conditioners, leading to a higher demand for electricity. In order to satisfy this increasing need, India has made significant investments and advancements in renewable energy. With the increasing use of renewable energy sources, the need for infrastructure to transmit and distribute electricity will grow, and that is exactly where AESL specializes in.
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