Adani Green Energy Poised To Grow Over Five Times In Six Years, Says Investec

Adani Green Energy Ltd. is set to achieve a five times increase in its installed capacity, targeting over 50 GW by fiscal 2030, according to Investec. The brokerage initiated coverage on AGEL with a 'buy' rating and a target price of Rs 2,515 per share, implying a potential upside of 30.7% from the current market price.

This growth trajectory mirrors the company's previous performance, having expanded its capacity five times to approximately 11 GW from fiscal 2019 to fiscal 2024, the brokerage said.

The company's growth will be predominantly driven by its substantial 30 GW and 11 GW installations in Khavda and Rajasthan, respectively, it said.

The company's growth strategy is supported by its adoption of cutting-edge technology, which is expected to enhance the capacity utilisation factor significantly. With anticipated CUF levels of 30% for solar, 33% for wind, and 43% for hybrid systems, AGEL is well-positioned to maximise efficiency, Investec said.

Additionally, the company plans to increase its share of merchant power to 15% by fiscal 2030, up from 5% in fiscal 2024, further boosting revenue and profit.

Investec highlighted AGEL's capital management as a key factor behind its positive outlook. The company's strategic debt arrangements, equity infusions from promoters and joint venture partners, and handling of operational cash flows collectively mitigate the risk of equity dilution, it said.

AGEL's net debt-to-equity ratio is projected to improve to 2.1 times by fiscal 2030 from 3.1 times in fiscal 2024, despite a significant increase in net debt to Rs 1.87 trillion over the same period.

The brokerage valued AGEL at 15 times the Ebitda for fiscal 2030, adjusting for fiscal 2029 net debt and the present value of minority interests, discounted at 12% over three years.

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