Adani Green Q2 Review — ICICI Securities Maintains 'Buy' On Multiple Growth Factors; Sees 16% Upside

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ICICI Securities Report

Adani Green Energy Ltd. has the strongest track record of developing renewables portfolio. It also has the resources to develop up to 30GW at a single location in Khavda. It has been miles ahead in the competition.

It has a capex to Ebitda ratio of close to ~7.5x, indicating high capital efficiency.

We value the asset with an EV to Ebitda of 16x – implying a doubling of the asset from 30GW to 60GW in the next eight years. The multiple factors include –

1. Adani Green’s strong track record of execution with 16.6GW of operational capacity,

2. superior capital efficiency,

3. access to funds, and

4. quality solar and wind resources on a large scale.

We maintain Buy with a revised target price of Rs 1,290 (earlier Rs 1,230). Revision takes into account increased locked-in Ebitda to Rs 226 billion (vs earlier Rs 220 billion).

Key risks:

1. Delay in commissioning of under-development capacity; and

2. lowerthan-estimated generation.

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