Morgan Stanley has initiated coverage on Adani Enterprises Ltd with an overweight rating and a target price of Rs 3,638 per share, indicating a potential upside of approximately 19 percent from the stock's closing price of Rs 3,059.60 on June 22.

The brokerage described Adani Enterprises as India's premier business incubator with exposure to several long-term growth themes, including transport infrastructure, digital infrastructure, energy transition and self-reliance-driven manufacturing. The report was released ahead of the Adani Group's 34th Annual General Meeting.

According to Morgan Stanley, FY27 is expected to be a key earnings inflection point for the company. Growth is likely to be driven by the commissioning of the Navi Mumbai International Airport, expansion and backward integration in the new energy business, commencement of tolling operations at the Ganga Expressway project and increased utilisation of its copper smelting operations.

The brokerage projects Adani Enterprises' revenue and EBITDA to grow at a compound annual growth rate of 19 percent and 32 percent, respectively, between FY26 and FY30. EBITDA is expected to rise from Rs 13,989 crore in FY26 to nearly Rs 42,348 crore by FY30, supported by contributions from airports, new energy businesses and primary industries. The company's data centre joint venture is also expected to witness significant growth during the period.

Morgan Stanley noted that the quality of earnings is improving as the company's revenue mix shifts away from commodity-linked businesses such as integrated resource management and mining toward regulated and contracted infrastructure assets, digital infrastructure platforms and manufacturing operations.

The brokerage highlighted execution risks related to large capital expenditure projects, regulatory challenges in airport operations, leverage and refinancing risks during the investment phase, and commodity price volatility in copper, PVC and integrated resource management businesses as key factors to monitor.

Following the report, Adani Enterprises shares gained as much as 2.4 percent during intraday trading on June 24 before trading higher in late-morning deals.

At the group's Annual General Meeting, chairman Gautam Adani emphasized infrastructure and intelligence as the two critical drivers that will shape India's future growth. He also stated that the Adani Group invested more than Rs 1.5 lakh crore in infrastructure during FY26, accounting for over 30 percent of India's total new private sector capital expenditure during the year.