Adani Green has the strongest track record of developing a renewables portfolio, with the resources to develop up to 30GW at a single location in Khavda, highlights ICICI Securities. The company remains significantly ahead of the competition. Its capex-to-Ebitda ratio of ~7.5 times indicates high capital efficiency. But Adani has been impacted by declining grid availability, resulting in a loss of Ebitda. To offset this, it has accelerated BESS deployment whose impact has been captured in locked-in Ebitda (increased to Rs 28,000 crore from Rs 27,000 crore earlier.
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ICICI Securities Report
Following Adani Green Energy Ltd.'s September-quarter results, the brokerage firm ICICI Securities has maintained Add rating with a revised target price of Rs 1,430 from Rs 1,650 earlier, and has valued the stock at 14 tiimes locked-in Ebitda.
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The brokerage highlighted that Adani Green reported a good quarter with revenue growth of 40% YoY to Rs 4,140 crore. Its Ebitda grew 46% YoY to Rs 3,800 crore and PAT stood at Rs 660 crore, all ahead of consensus estimates.
Total generation for Q2 FY27 stood at 12 billion units (+33% YoY). Wind plant load factor improved 510 basis points YoY in H1 FY27 on the back of favourable wind conditions.
Outlook and Valuation
Adani Green 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 significantly ahead of the competition. Its capex-to-Ebitda ratio of ~7.5 times indicates high capital efficiency.
But Adani has been impacted by declining grid availability, resulting in a loss of Ebitda.
To offset this, it has accelerated BESS deployment whose impact has been captured in locked-in Ebitda (increased to Rs 28,000 crore from Rs 27,000 crore earlier.
The brokerage expected the connectivity issue to be resolved by Dec'26 with the commissioning of a 7GW line. This is now delayed by at least a quarter and remains a key monitorable.
Further, delays could also possibly slow down its capacity addition. Considering these factors, ICICI Securities has trimmed its valuation multiple to 14 times vs 16x earlier.
Key risks:
Delay in commissioning of under-development capacity; and lower than-estimated generation, are the key risks to the brokerage's call.
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