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ICICI Securities Report
Following Adani Green Energy Ltd.'s strong June quarter performance, domestic brokerage firm ICICI Securities has raised its target price to Rs 1,650 from Rs 1,315, implying a potential upside of about 25% from the current market price, while maintaining its 'Add' rating on the stock.
The brokerage highlighted that Adani Green Energy reported a good quarter, in line with its estimates, with revenue and Ebitda growing by 30% YoY to Rs 4,400 crore and Rs 4,000 crore, respectively.
Its runrate Ebitda stands at Rs 17,000 crore. Growth was propelled by capacity addition of 4.4GW YoY and commissioning of BESS in the last two quarters. PAT stood at Rs 840 crore (+19% YoY).
Outlook and valuation
According to ICICI Securities Adani Greeh Energy has the strongest track record of developing a renewables portfolio, with the resources to develop up to 30GW at a single location in Khavda.
The company remains miles ahead of the competition. With a capex-to-Ebitda ratio of ~7.5x, it indicates high capital efficiency.
The brokerage has assigned a multiple of 16x, factoring in an improved power purchase agreement mix and proven execution capabilities.
The brokerage have revised its earnings to factor in contributions from BESS and has maintained Add rating with a higher target price.
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