Adani Energy Solutions Is Among Jefferies India’s Top 3 Power Picks Despite the RBI’s 25 bps Rate Hike: Regulated Equity, Fixed-Rate Loans and Lower Pass-Through, the Rs 2,060 Target, Debt and the Risks
- October 8, 2026
- Posted by: Harsh Piplani
- Category: News
Jefferies top 3 power picks: AESL, JSW Energy, NTPC. AESL target Rs 2,060 vs about Rs 1,354 (+52%). Net debt Rs 43,428 cr. Power seen shielded from hikes.
Quick Answer
Adani Energy Solutions is among Jefferies India’s top three power picks, with JSW Energy and NTPC, and the brokerage says power companies have some protection against the RBI’s 25 bps rate hike through regulated equity returns, fixed-rate loans and lower pass-through of rate increases, while its target of Rs 2,060 is about 52% above the price near Rs 1,354. The case rests on India’s only listed private-sector pure-play transmission and distribution company, with an earnings growth rate of about 21% a year to FY30, a share of about 23% in private competitive transmission bids and a Rs 1.1 trillion bid pipeline. The balance sheet is the counterpoint, with net debt of about Rs 43,428 crore at March 2026, capex of Rs 3,498 crore in Q1 alone and a P/E near 55 times, so even a protected rate profile can hurt if funding costs rise. The stock is down about 18% in three months, so the Jefferies call is a view that execution and the order book will outweigh valuation and rate risk.
Adani Energy Solutions is the transmission and distribution arm of the Adani group, with a network of 27,949 circuit kilometres and a growing smart-metering and energy-trading business. The Jefferies note comes at a time when power demand is up about 15% year on year in September and coal stocks at plants are thin.
If you are deciding whether a rate hike changes the power thesis, this article covers the Jefferies top picks among power stocks (Adani Energy Solutions, JSW Energy and NTPC), the argument on rate protection, the Adani Energy Solutions target of Rs 2,060 against Rs 1,354, the 21% earnings growth and smart meter business, net debt of Rs 43,428 crore, valuation and the risks.
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Adani Energy Solutions: Why Jefferies Says Power Is Protected From the Rate Hike
| Protection | How it works | My note |
|---|---|---|
| Regulated equity | Transmission and similar assets earn a regulated return on the equity part of their capital | Returns do not move with market rates day to day |
| Fixed-rate loans | A part of power companies’ debt is at fixed rates | Only new and floating debt reprices |
| Lower rate-hike pass-through | Regulators and tariffs pass on only part of a rate rise | Both a shield and a limit on upside |
These are the points in the Jefferies report as summarised in the headline, and the exact share of fixed-rate debt at Adani Energy Solutions is not given in my sources, so check the company’s disclosures.
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Jefferies Top Picks: The Top 3 Power Picks Including Adani Energy Solutions
| Stock | Jefferies view | Target and upside |
|---|---|---|
| Adani Energy Solutions | Buy; a top pick | Rs 2,060, about 52% above Rs 1,354 |
| JSW Energy | Buy; a top pick | Rs 720, about 45% to 48% upside |
| NTPC | Buy; a top pick | Target not stated in my sources |
| Adani Power | Buy | Rs 270, about 38% upside |
| Adani Green Energy | Buy | Rs 1,695, about 37% upside |
| Tata Power | Underperform | Rs 335, below the price |
Jefferies expects utilities to keep growing earnings from FY26 to FY29 through execution, and it names Adani Energy Solutions for visible EBITDA growth above 20%.
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Growth Drivers Behind Adani Energy Solutions
| Driver | Detail |
|---|---|
| Transmission bids | About 23% share of private competitive bidding, second only to Power Grid; the industry bid pipeline is about Rs 1.1 trillion against Rs 900 billion a year ago |
| Projects under execution | About Rs 718 billion |
| Earnings growth | About 21% a year through FY30, according to Jefferies |
| Smart metering | Scaling up, including the IntelliSmart acquisition |
| Power trading | A 25-year round-the-clock supply agreement for 2.5 GW with Maharashtra’s distribution company; contracted capacity to rise from about 20% in Q1 FY27 to about 57% by FY28 |
| Q1 FY27 results | Revenue about Rs 9,711 crore; profit of about Rs 1,150 crore to Rs 1,237 crore, more than double a year earlier, according to different sources |
Capex rose about 57% to Rs 3,498 crore in Q1 FY27 and annual capex runs at Rs 200 billion to Rs 250 billion, which is the fuel for its growth and also the reason for its debt.
Debt and Rate Sensitivity of Adani Energy Solutions
| Measure | Figure | Comment |
|---|---|---|
| Net debt | About Rs 43,428 crore at March 2026 | Rising with capex |
| Upper bound of a 25 bps rate effect | About Rs 109 crore a year before tax | If all net debt were floating, my calculation; the real effect is smaller |
| Q1 FY27 profit | About Rs 1,150 crore to Rs 1,237 crore | A year’s upper-bound effect is under 10% of one quarter’s profit |
| Price to earnings | About 55 times trailing and 41 times forward | A premium valuation sensitive to yields |
| Price move | Down about 18% in three months, up about 47% in a year | Volatile |
The direct interest cost of a 25 bps hike looks small for the company, and the bigger risk to the stock is a higher discount rate on a premium multiple if yields keep rising.
Valuation and the Adani Energy Solutions Target
| Source | Target | Note |
|---|---|---|
| Jefferies | Rs 2,060 | Raised from Rs 1,905; sum-of-the-parts |
| Jefferies upside case | Rs 2,400 | If transmission and smart-meter wins add up |
| Consensus of nine analysts | About Rs 1,748 | About 29% above the price |
| Price on 7 October | About Rs 1,354 | Market capitalisation about Rs 1.66 lakh crore |
Jefferies values the trading business at 5 times EV/EBITDA against 22 times for the rest, so the trading segment adds less to Adani Energy Solutions than its headline growth suggests.
Risks Behind the Jefferies Call on Adani Energy Solutions
Debt and funding costs: Net debt above Rs 43,000 crore and heavy capex make refinancing and rates relevant.
Market share: Jefferies lists loss of market share in transmission bids as a downside.
Execution: Delays in commissioning projects would hit growth.
Valuation: A P/E near 55 times leaves little room for a miss.
Group and governance perceptions: Adani group stocks can swing on sentiment that is unrelated to results.
What to Watch Next for Adani Energy Solutions
- Q2 FY27 results, expected in late October, for profit, capex and debt.
- New transmission bid wins and the order book.
- Smart-meter rollout and trading contracts.
- Bond yields and the RBI’s next move in December.
- Whether the stock holds recent support after a fall of about 18% in three months.
Conclusion
Adani Energy Solutions is a top 3 Jefferies power pick with a target of Rs 2,060, about 52% above its price, and the brokerage argues that regulated equity, fixed-rate loans and lower pass-through shield power companies from the RBI’s 25 bps hike. Net debt of Rs 43,428 crore and a P/E near 55 times are the risks, and results in late October are the next test. Consult a SEBI-registered advisor before making any decision.
Disclaimer: Data and figures in this article are sourced from publicly available information. These may or may not be accurate. Please verify all data with the official NSE (nseindia.com) and BSE (bseindia.com) websites before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).
Frequently Asked Questions
Why is Adani Energy Solutions among the Jefferies top picks?
Ans. Jefferies cites visible EBITDA growth above 20%, a strong transmission bid pipeline, smart metering and trading deals, and puts the target at Rs 2,060.
Does the RBI rate hike hurt power companies?
Ans. Jefferies says they have some protection through regulated equity, fixed-rate loans and lower pass-through of hikes.
What are Jefferies’ other top power picks?
Ans. JSW Energy and NTPC, along with Adani Energy Solutions.
What is the Adani Energy Solutions target price?
Ans. Jefferies has Rs 2,060, with an upside case of Rs 2,400, against a price near Rs 1,354.
How much debt does Adani Energy Solutions have?
Ans. Net debt was about Rs 43,428 crore at March 2026 and is rising with capex.
How expensive is Adani Energy Solutions?
Ans. It trades near 55 times trailing and 41 times forward earnings.
What are the main risks?
Ans. Debt and funding costs, loss of market share, project delays, valuation and group sentiment.
Should I buy Adani Energy Solutions now?
Ans. This article does not constitute investment advice. Consult a SEBI-registered financial advisor.
