ARE&M - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.6

Let’s take a close look at ARE&M (likely Adani Renewable Energy & Materials) — an infrastructure-heavy player with decent capital efficiency, low debt, and a reasonable valuation, though current profit contraction tempers the outlook.

⚙️ Core Financial Overview

ROE: 11.9%, ROCE: 16.2% — respectable return ratios, with room for improvement.

EPS: ₹51.6 — solid earnings per share; supports steady cash generation.

PAT Quarterly Trend: ₹222 Cr ↓ ₹162 Cr — -29.7% decline, suggests margin pressure or seasonal weakness.

Debt-to-Equity: 0.04 — nearly debt-free; strategic advantage in capex-heavy sectors.

Dividend Yield: 1.06% — modest but healthy shareholder payout.

📊 Valuation Insights

Metric Value Commentary

P/E Ratio 21.5 ✅ Undervalued vs Industry PE: 31.2

P/B Ratio ~2.46 Acceptable given Book Value ₹404

PEG Ratio 1.17 Fair valuation relative to earnings growth

Intrinsic Value Near CMP Reasonably priced, driven by asset-light capital structure

🌱 Business Model & Strategic Positioning

Likely operates in renewables, EPC contracts, or infra materials — sectors with long-term tailwinds.

Strengths

Low debt, scale efficiencies, and visible asset base.

Institutional movement

FII ↓ -1.32%, DII ↓ -0.59% — caution signals amid profit drop.

Challenges

Recent dip in profits and possible project delays may weigh on sentiment.

Execution risk typical of infra-based businesses.

📉 Technical Trends

RSI: 52.1 — mid-range, no major bias.

MACD: +2.34 — emerging bullish momentum.

CMP ₹993 trading

Just below DMA 200 (₹1,062) but slightly above DMA 50 (₹992) — technical inflection point.

Closer to support at ₹805, potential upside if sector momentum resumes.

🎯 Entry Zone & Investment Thesis

Entry Range: ₹970–₹990 — attractive zone for accumulation near support and moving averages.

Holding Strategy

Long-term prospects tied to renewable capex cycle and infra push.

Monitor quarterly margins and asset monetization trends.

Suitable for moderate-risk growth-oriented investors, especially with ESG tilt.

Curious to compare ARE&M with Green infra peers like Tata Power Renewable, JSW Energy, or Sterling Wilson? I can set up a head-to-head on returns, debt levels, and asset scalability 📈🔋.

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