Ahead of the Diwali festival, one Adani Group stock engaged in the green energy sector is recommended to BUY. There is the potential for more than a 55% upside in the stock. The reason behind the latest bullish outlook is that this Adani company has recorded stable operating performance in Q2FY25. Who? This is none other than Adani Green Energy.
Adani Green Energy Stock Price:
On October 25, Adani Green Energy's stock price ended at Rs 1643.50 apiece, down by 2.93% on BSE with a market cap of Rs 2,60,335.74 crore. This gives a buy-on-dips opportunity in the stock.
The stock's 52-week high and low is Rs 2,173.65 apiece and Rs 816.00 apiece respectively.
YTD, the stock is up by merely 3% on BSE.
Adani Green Energy Q2 Results:
In the second quarter of FY25, Adani Green Energy posted strong revenue, EBITDA and Cash profit growth primarily backed by robust greenfield capacity addition of 2,868 MW and consistent plant performance. Its cash profit was at Rs 1,249 crore, up by 21% YoY in Q2FY25. While revenue growth surged by 20% YoY to Rs 4,836 crore.
Further, operating capacity expansion sored by 34% YoY to 11.2 GW, and energy sales were up by 20% YoY to 14,128 million units in the quarter. Additionally, the company achieved EBITDA margin of 92.2%.
BUY Adani Green Energy Stock:
In its latest note, Emkay Global said, "AGEL's consolidated Q2FY25 EBITDA rose 25% YoY to Rs22.7bn (down 6% QoQ), led by stable operating performance and a jump in equipment sales. Consol. PAT (after minority interest and share from associates-JVs) came in at Rs2.76bn in Q2FY25, down 26% YoY and 38% QoQ due to a jump in MI to Rs2.4bn from asset transfer to Total JV. Net debt rose 9% H-o-H to Rs582bn as of Sep-24-end."
Further, the brokerage cited that Adani Green's management estimates 2GW/4GW RE capacity to get commissioned in Q3FY25/Mar-25, besides the annual RE capacity addition target of >6GW. It also guided to an annualized EBITDA run-rate of Rs108/160bn for the current 11.2GW/17GW FY25-end capacity.
On the valuation, Emkay's note said, "We value AGEL at 15x FY30E EV/EBITDA, discounted at 12% (CoE) to Sep-25E which is reasonably conservative and backed by the 30-60% revenue-earnings CAGR. We reduce FY25E AEPS by 35% due to MI adjustment, although over the long term, the impact is not significant (~2% on TP). Key risks: project execution, policy, equipment inflation, technology, and resource yield-related."
Thereby, the brokerage said that they have trimmed FY25E EBITDA 7% to reflect H1 run-rate, while largely retaining FY26-27E EBITDA. We retain BUY with an unchanged Sep-25E TP of Rs2,550.
Adani Green Energy Limited (AGEL) is India's largest and one of the leading renewable energy companies in the world enabling the clean energy transition. AGEL develops, owns, and operates utility-scale grid-connected solar, wind, hybrid renewable power plants and is further developing energy storage solutions. AGEL currently has an operating renewable portfolio of 11.2 GW, the largest in India, spread across 12 states.
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