Mumbai, Feb 5 (NationPress) The shares of Adani Energy Solutions Ltd (AESL) experienced an increase of up to 2.5%, reaching Rs 1,013 per share on Thursday, despite a downturn in the broader markets, following Morgan Stanley's initiation of coverage on the stock.

The international brokerage assigned an 'overweight' rating along with a price target of Rs 1,133, indicating a potential 16% upside from the previous day's closing price.

Morgan Stanley regards AESL as a significant beneficiary of India's extensive power grid expansion, projecting over Rs 10 trillion in anticipated transmission investments over the coming decade.

In the distribution sector, the brokerage highlights supportive policies for smart metering, which include subsidies and initiatives aimed at promoting private sector participation.

The global firm also emphasizes AESL's impressive execution history, citing its ability to deliver projects in a timely and cost-effective manner. Its integrated operations in transmission, distribution, and smart metering establish it as a comprehensive grid infrastructure platform.

Described as a preeminent player in the private sector for transmission and distribution, Adani Energy Solutions commands nearly 50% of private-sector transmission projects. It serves approximately 3.3 million consumers across the distribution areas of Mumbai and Mundra SEZ, while also maintaining a notable presence in smart metering.

The report forecasts a 21% compound annual growth rate (CAGR) in EBITDA from FY25 to FY30, anticipating EBITDA to approach around Rs 2,600 crore by FY30. This growth is expected to be fueled by successful transmission project acquisitions, regulated distribution capital expenditures, and the execution of smart metering contracts.

Transmission is identified as the dominant growth driver in the near to medium term, with an existing order book valued at about Rs 7,800 crore as of Q3 FY26.

Morgan Stanley estimates that AESL could capture approximately 20% of new TBCB projects, translating to a potential annual opportunity of Rs 20,000 crore.

In the distribution arena, opportunities arising from parallel licensing are noted, with AESL aiming for a 20% market share.

The regulated asset base is projected to expand at around 11% CAGR, supported by yearly capital expenditures nearing Rs 1,600 crore.

For smart metering, AESL targets a market share of about 20%. Its order book, consisting of 24.6 million meters, is anticipated to be largely fulfilled by FY27, with smart metering expected to contribute approximately 9% to FY28 EBITDA, excluding non-IFRS adjustments.

The outlook for Adani stocks is increasingly viewed as a value investment. Several companies within the Adani group, including Adani Power, Adani Ports, Adani Green Energy, and Adani Enterprises, have demonstrated significant growth in earnings over the past 2-3 years, making these stocks appealing for long-term investors.

Morgan Stanley has also initiated coverage on Adani Ports & SEZ and Adani Power, signifying confidence in their business models.