ABREL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.8
| Stock Code | ABREL | Market Cap | 13,906 Cr. | Current Price | 1,245 ₹ | High / Low | 2,538 ₹ |
| Stock P/E | 91.0 | Book Value | 420 ₹ | Dividend Yield | 0.16 % | ROCE | 3.72 % |
| ROE | 3.37 % | Face Value | 10.0 ₹ | DMA 50 | 1,351 ₹ | DMA 200 | 1,556 ₹ |
| Chg in FII Hold | 0.08 % | Chg in DII Hold | -0.50 % | PAT Qtr | 68.6 Cr. | PAT Prev Qtr | 31.4 Cr. |
| RSI | 39.2 | MACD | -24.7 | Volume | 1,44,580 | Avg Vol 1Wk | 1,64,400 |
| Low price | 1,080 ₹ | High price | 2,538 ₹ | PEG Ratio | -5.14 | Debt to equity | 0.89 |
| 52w Index | 11.3 % | Qtr Profit Var | 3.77 % | EPS | 31.5 ₹ | Industry PE | 26.3 |
📊 Financials: Aditya Birla Renewable Energy Limited (ABREL) shows weak fundamentals with ROE at 3.37% and ROCE at 3.72%, reflecting poor efficiency. Debt-to-equity is high at 0.89, indicating leveraged operations. Quarterly PAT rose to ₹68.6 Cr. from ₹31.4 Cr., showing improvement but still modest. EPS is ₹31.5, highlighting limited earnings power relative to its market capitalization.
💰 Valuation: The stock trades at a very high P/E of 91.0 compared to the industry average of 26.3, suggesting extreme overvaluation. P/B ratio is ~3.0 (Price ₹1,245 / Book Value ₹420). PEG ratio is negative (-5.14), signaling poor growth-adjusted valuation. Intrinsic value appears lower than current price, making entry unattractive at present levels.
🏢 Business Model: ABREL operates in renewable energy, focusing on solar and wind power generation. Its competitive advantage lies in group backing, scale, and government support for clean energy. However, profitability metrics remain weak, limiting overall health.
📈 Entry Zone: A safer entry zone would be near ₹1,100–1,200, closer to its 52-week low. Current valuation does not justify fresh entry. Long-term holding is risky unless profitability improves and valuation normalizes.
Positive
- 📌 PAT improvement from ₹31.4 Cr. to ₹68.6 Cr.
- 📌 EPS of ₹31.5 provides earnings base
- 📌 Increase in FII holdings (+0.08%)
- 📌 Strong positioning in renewable energy sector
Limitation
- ⚠️ Extremely high P/E ratio (91.0) vs industry average (26.3)
- ⚠️ Weak ROE (3.37%) and ROCE (3.72%)
- ⚠️ Negative PEG ratio (-5.14) highlights poor growth-adjusted valuation
- ⚠️ Dividend yield of 0.16% is modest
- ⚠️ High debt-to-equity ratio (0.89)
Company Negative News
- 📉 Decline in DII holdings (-0.50%)
- 📉 Weak profitability metrics despite revenue scale
Company Positive News
- 📈 Increase in FII holdings (+0.08%)
- 📈 PAT improvement quarter-on-quarter
Industry
- 🏦 Industry PE at 26.3, far below ABREL’s valuation
- 📊 Renewable energy sector benefits from government incentives and rising demand for clean energy
Conclusion
🔎 ABREL is fundamentally weak with poor return metrics and extreme overvaluation despite strong positioning in renewables. Entry is advisable only near ₹1,100–1,200. Long-term holding is risky unless profitability improves and valuation aligns with industry norms.
Would you like me to also prepare a side-by-side comparison of ABREL vs renewable energy peers to highlight its valuation gap more clearly?