ADANIGREEN - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.8
| Stock Code | ADANIGREEN | Market Cap | 2,24,296 Cr. | Current Price | 1,362 ₹ | High / Low | 1,472 ₹ |
| Stock P/E | 278 | Book Value | 90.4 ₹ | Dividend Yield | 0.00 % | ROCE | 5.94 % |
| ROE | 6.98 % | Face Value | 10.0 ₹ | DMA 50 | 1,171 ₹ | DMA 200 | 1,056 ₹ |
| Chg in FII Hold | -0.32 % | Chg in DII Hold | 0.25 % | PAT Qtr | 178 Cr. | PAT Prev Qtr | 82.0 Cr. |
| RSI | 63.9 | MACD | 77.1 | Volume | 30,53,284 | Avg Vol 1Wk | 48,89,018 |
| Low price | 765 ₹ | High price | 1,472 ₹ | PEG Ratio | 3.87 | Debt to equity | 1.51 |
| 52w Index | 84.4 % | Qtr Profit Var | 58.1 % | EPS | 3.67 ₹ | Industry PE | 28.5 |
📊 Financials: Adani Green Energy (ADANIGREEN) shows weak fundamentals with ROE at 6.98% and ROCE at 5.94%, reflecting low efficiency. Debt-to-equity is high at 1.51, indicating leveraged operations. Quarterly PAT rose to ₹178 Cr. from ₹82 Cr., showing a 58.1% variance, but overall profitability remains modest. EPS is ₹3.67, highlighting weak earnings power relative to its large market capitalization.
💰 Valuation: The stock trades at a very high P/E of 278 compared to the industry average of 28.5, suggesting extreme overvaluation. P/B ratio is ~15.1 (Price ₹1,362 / Book Value ₹90.4). PEG ratio of 3.87 signals costly growth expectations. Intrinsic value appears significantly lower than current price, making entry unattractive at present levels.
🏢 Business Model: Adani Green Energy operates in renewable energy, focusing on solar and wind power generation. Its competitive advantage lies in scale, government support for renewables, and rising demand for clean energy. However, profitability metrics and high leverage limit overall health.
📈 Entry Zone: A safer entry zone would be near ₹900–1,050, 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
- 📌 Strong quarterly PAT growth (58.1% variance)
- 📌 Increase in DII holdings (+0.25%)
- 📌 Strategic positioning in renewable energy sector
Limitation
- ⚠️ Extremely high P/E ratio (278) vs industry average (28.5)
- ⚠️ Weak ROE (6.98%) and ROCE (5.94%)
- ⚠️ PEG ratio of 3.87 highlights costly growth expectations
- ⚠️ Dividend yield of 0.00% offers no income
- ⚠️ High debt-to-equity ratio (1.51)
Company Negative News
- 📉 Decline in FII holdings (-0.32%)
- 📉 Weak profitability metrics despite revenue scale
Company Positive News
- 📈 Increase in DII holdings (+0.25%)
- 📈 PAT improvement quarter-on-quarter
Industry
- 🏦 Industry PE at 28.5, far below Adani Green Energy’s valuation
- 📊 Renewable energy sector benefits from government incentives and rising demand for clean energy
Conclusion
🔎 Adani Green Energy is fundamentally weak with poor return metrics and extreme overvaluation despite strong positioning in renewables. Entry is advisable only near ₹900–1,050. 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 Green Energy vs renewable energy peers to highlight its valuation gap more clearly?