ADANIENSOL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.9
| Stock Code | ADANIENSOL | Market Cap | 1,64,576 Cr. | Current Price | 1,370 ₹ | High / Low | 1,464 ₹ |
| Stock P/E | 288 | Book Value | 174 ₹ | Dividend Yield | 0.00 % | ROCE | 4.89 % |
| ROE | 2.81 % | Face Value | 10.0 ₹ | DMA 50 | 1,222 ₹ | DMA 200 | 1,039 ₹ |
| Chg in FII Hold | -1.24 % | Chg in DII Hold | 0.10 % | PAT Qtr | 199 Cr. | PAT Prev Qtr | 114 Cr. |
| RSI | 57.8 | MACD | 36.1 | Volume | 34,10,539 | Avg Vol 1Wk | 34,23,302 |
| Low price | 745 ₹ | High price | 1,464 ₹ | PEG Ratio | 5.80 | Debt to equity | 0.53 |
| 52w Index | 87.0 % | Qtr Profit Var | 0.73 % | EPS | 4.75 ₹ | Industry PE | 70.6 |
📊 Financials: Adani Energy Solutions (ADANIENSOL) shows weak fundamentals with ROE at 2.81% and ROCE at 4.89%, reflecting poor efficiency. Debt-to-equity is moderate at 0.53, indicating manageable leverage. Quarterly PAT rose to ₹199 Cr. from ₹114 Cr., but the profit variance is just 0.73%, showing limited growth momentum. EPS is ₹4.75, highlighting weak earnings power relative to market capitalization.
💰 Valuation: The stock trades at a very high P/E of 288 compared to the industry average of 70.6, suggesting extreme overvaluation. P/B ratio is ~7.9 (Price ₹1,370 / Book Value ₹174). PEG ratio of 5.80 signals costly growth expectations. Intrinsic value appears significantly lower than current price, making entry unattractive at present levels.
🏢 Business Model: Adani Energy Solutions operates in power transmission and distribution, benefiting from India’s infrastructure and energy demand. Its competitive advantage lies in scale and integration within the Adani Group. However, profitability metrics remain weak, limiting overall health.
📈 Entry Zone: A safer entry zone would be near ₹900–1,000, closer to its DMA 200 and below current highs. Current valuation does not justify fresh entry. Long-term holding is risky unless profitability improves and valuation normalizes.
Positive
- 📌 PAT growth from ₹114 Cr. to ₹199 Cr.
- 📌 Moderate debt-to-equity ratio (0.53)
- 📌 Increase in DII holdings (+0.10%)
Limitation
- ⚠️ Extremely high P/E ratio (288) vs industry average (70.6)
- ⚠️ Weak ROE (2.81%) and ROCE (4.89%)
- ⚠️ PEG ratio of 5.80 highlights costly growth expectations
- ⚠️ Dividend yield of 0.00% offers no income
Company Negative News
- 📉 Decline in FII holdings (-1.24%)
- 📉 Weak profitability metrics despite revenue scale
Company Positive News
- 📈 Increase in DII holdings (+0.10%)
- 📈 PAT improvement quarter-on-quarter
Industry
- 🏦 Industry PE at 70.6, far below Adani Energy Solutions’ valuation
- 📊 Power transmission sector benefits from infrastructure expansion and rising energy demand
Conclusion
🔎 Adani Energy Solutions is fundamentally weak with poor return metrics and extreme overvaluation. Entry is advisable only near ₹900–1,000. 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 Adani Energy Solutions vs power sector peers to highlight its valuation gap more clearly?