By Brazil Stock Guide – Equatorial (EQTL3) unveiled a robust growth plan at its Investor Day in Goiânia, hosted at Celg’s headquarters, betting on organic expansion after more than R$21 billion (US$3.9 billion) in acquisitions, including Echoenergia, Celg and Sabesp. BTG Pactual reiterated its Buy rating, setting a price target of R$48 per share, or 31% above the current R$36.64 level.
Since 2018, Equatorial’s workforce has nearly tripled from 18,000 to 55,000, while its customer base grew from 5 million to 14 million. Adjusted EBITDA jumped from R$2 billion (US$373 million) in 2018 to R$10.9 billion (US$2.03 billion) in 2024. Following the divestment of transmission assets, leverage stood at 2.8 times net debt/EBITDA in June. Management projects substantial EBITDA growth through 2030, with distribution and sanitation as strategic priorities.
Restructuring efforts underway
We invested more than R$4.9 billion (US$913 million) in Celg and R$2.6 billion (US$484 million) in CEEE-D and are already seeing clear improvements in service quality and cost reduction, executives told investors, highlighting stronger regulatory compliance and a steep drop in consumer complaints in Goiás.
Distribution remains the backbone of Equatorial’s strategy, with four of its seven concessions already meeting quality metrics and all operating below regulatory outage thresholds. Its “Utility of the Future” program, launched in 2023, is preparing the company for full retail market liberalization, large-scale rollout of smart meters, and rising distributed generation.
In sanitation, Equatorial sees opportunities aligned with its partnership with Sabesp, as rivals grapple with high leverage and constrained capex. Opportunities outside the energy and sanitation sectors may be evaluated, but not in the short term.
Valuation and outlook
Equatorial trades at 9.6 times estimated 2025 earnings and 7.4 times EV/EBITDA. Dividend yield is expected to climb from 3.5% this year to more than 5% in 2027. Shares have gained 7.5% in August and 7.9% over the past 12 months. BTG says the combination of operational efficiency, capital discipline and regulatory readiness could support further re-rating in the medium term.
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