ADANIPOWER - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.2
| Stock Code | ADANIPOWER | Market Cap | 4,22,778 Cr. | Current Price | 219 ₹ | High / Low | 234 ₹ |
| Stock P/E | 38.5 | Book Value | 27.5 ₹ | Dividend Yield | 0.00 % | ROCE | 19.2 % |
| ROE | 22.1 % | Face Value | 2.00 ₹ | DMA 50 | 196 ₹ | DMA 200 | 158 ₹ |
| Chg in FII Hold | 0.09 % | Chg in DII Hold | 0.28 % | PAT Qtr | 3,087 Cr. | PAT Prev Qtr | 2,047 Cr. |
| RSI | 59.9 | MACD | 7.97 | Volume | 1,86,15,147 | Avg Vol 1Wk | 2,97,92,423 |
| Low price | 105 ₹ | High price | 234 ₹ | PEG Ratio | 17.3 | Debt to equity | 0.93 |
| 52w Index | 88.3 % | Qtr Profit Var | 30.9 % | EPS | 5.70 ₹ | Industry PE | 32.0 |
📊 Financials: Adani Power (ADANIPOWER) shows moderate fundamentals with ROE at 22.1% and ROCE at 19.2%, reflecting decent efficiency. Debt-to-equity is relatively high at 0.93, indicating leveraged operations. Quarterly PAT rose to ₹3,087 Cr. from ₹2,047 Cr., showing a 30.9% variance. EPS is ₹5.70, highlighting modest earnings power relative to its large market capitalization.
💰 Valuation: The stock trades at a P/E of 38.5 compared to the industry average of 32.0, suggesting a premium valuation. P/B ratio is ~8.0 (Price ₹219 / Book Value ₹27.5). PEG ratio of 17.3 signals costly growth expectations. Intrinsic value appears lower than current price, making entry unattractive at present levels.
🏢 Business Model: Adani Power operates in thermal power generation, benefiting from India’s rising electricity demand. Its competitive advantage lies in scale, integration within the Adani Group, and long-term power purchase agreements. However, profitability metrics remain modest, limiting overall health.
📈 Entry Zone: A safer entry zone would be near ₹170–190, closer to its DMA 200 and below current highs. Current valuation does not justify fresh entry. Long-term holding is favorable only if profitability improves and valuation normalizes.
Positive
- 📌 Strong quarterly PAT growth (30.9% variance)
- 📌 ROE (22.1%) and ROCE (19.2%) reflect decent efficiency
- 📌 Increase in FII holdings (+0.09%)
- 📌 Increase in DII holdings (+0.28%)
Limitation
- ⚠️ High P/E ratio (38.5) vs industry average (32.0)
- ⚠️ High debt-to-equity ratio (0.93)
- ⚠️ PEG ratio of 17.3 highlights costly growth expectations
- ⚠️ Dividend yield of 0.00% offers no income
- ⚠️ EPS of ₹5.70 is modest relative to market cap
Company Negative News
- 📉 High leverage raises risk exposure
Company Positive News
- 📈 Increase in FII holdings (+0.09%)
- 📈 Increase in DII holdings (+0.28%)
- 📈 Quarterly PAT improvement
Industry
- 🏦 Industry PE at 32.0, lower than Adani Power’s valuation
- 📊 Power sector benefits from rising electricity demand in India
Conclusion
🔎 Adani Power is moderately valued with decent return metrics but high leverage and costly growth expectations. Entry is advisable only near ₹170–190. Long-term holding is favorable only if profitability improves and valuation aligns with industry norms.
Would you like me to also prepare a side-by-side comparison of Adani Power vs power sector peers to highlight its valuation positioning more clearly?