ABREL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 2.9

Here’s a detailed analysis of Aditya Birla Renewables Energy Ltd (ABREL)

🧾 Core Financials

Profitability & Growth

Quarterly PAT dropped from ₹66.1 Cr to ₹27.5 Cr, showing a 20.2% YoY increase but a sharp QoQ decline.

EPS: -₹0.57 — negative, indicating net losses on a per-share basis.

ROE: 3.84% and ROCE: 4.25% — weak return metrics, suggesting inefficient capital deployment.

Debt & Liquidity

Debt-to-equity: 0.87 — moderate leverage, typical for capital-intensive renewable projects.

Dividend Yield: 0.11% — negligible, reflecting reinvestment focus.

📊 Valuation Indicators

Metric Value Industry Avg Remarks

P/E Ratio 150 16.2 Extremely overvalued

P/B Ratio ~4.86 ~3.5 Premium to book value

PEG Ratio -22.5 ~1 Not meaningful due to negative EPS

Intrinsic Value ~₹1,500–₹1,600 — Overpriced vs fundamentals

The valuation is highly stretched, with negative EPS and PEG making growth assumptions unreliable.

🏢 Business Model & Competitive Edge

Core Operations: Renewable energy generation, primarily solar and wind.

Strengths

Backed by Aditya Birla Group, offering financial stability and long-term strategic support.

Positioned in a high-growth sector aligned with India’s clean energy goals.

Risks

Weak profitability and negative earnings.

High valuation with limited earnings support.

FII outflows (-0.17%) suggest institutional caution.

📉 Technical & Entry Zone

Current Price: ₹1,907

DMA 50/200: ₹1,919 / ₹2,071 — trading below long-term average.

RSI: 56.6 — neutral zone.

MACD: -5.28 — bearish crossover.

Suggested Entry Zone: ₹1,600–₹1,700 range, ideally near 52-week low of ₹1,638 or below intrinsic value.

🕰️ Long-Term Holding Guidance

Avoid fresh entry until earnings stabilize and valuation cools.

Hold only if already invested, with a long-term view and tolerance for volatility.

Ideal for long-term only if

ROE improves above 10% and EPS turns positive.

Valuation normalizes below P/E 50 and PEG < 2.

Would you like a peer comparison with ReNew Power or a breakdown of ABREL’s installed capacity and pipeline projects?

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