ADANIGREEN - Investment Analysis

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

Investment Rating: 3.0

📊 Fundamental Analysis Summary

Adani Green Energy (ADANIGREEN) is a high-growth renewable energy player, but its valuation, debt levels, and capital efficiency metrics raise red flags for long-term conservative investors.

Metric Value Interpretation

Market Cap ₹1,64,684 Cr Large-cap — strong visibility and scale

Stock P/E 89.5 Extremely overvalued vs. industry PE of 41.2

PEG Ratio 1.59 Overvalued relative to growth — caution advised

ROE / ROCE 14.6% / 8.70% ROE decent; ROCE below ideal — weak capital efficiency

Dividend Yield 0.00% No dividends — purely growth-oriented

Debt-to-Equity 6.59 Very high leverage — major financial risk

EPS ₹10.7 Low earnings relative to price

Book Value ₹76.6 Price-to-book ratio ~13.3× — extremely expensive on asset basis

PAT Growth (QoQ) +140.5% Strong profit surge — positive momentum

RSI / MACD 51.5 / +3.88 Neutral RSI; MACD mildly bullish — short-term strength

FII/DII Holding Change -0.87% / +0.46% FII selling; DII accumulation — mixed sentiment

52W Price Range ₹758 – ₹2,092 Currently mid-range — not ideal for fresh entry

📉 Valuation & Entry Price Zone

Despite strong PAT growth, the PEG ratio and extremely high P/E suggest the stock is priced for perfection. Debt levels are a major concern, especially in a capital-intensive sector.

Ideal Entry Zone: ₹850 – ₹950

This range offers a better margin of safety closer to the 52-week low.

Wait for signs of debt reduction and ROCE improvement before entering aggressively.

🧭 If You Already Hold the Stock

Holding Strategy

Time Horizon: 2–3 years, contingent on debt reduction and ROCE improvement.

Exit Strategy: Consider trimming if price rallies above ₹1,300–₹1,400 without corresponding improvement in ROCE and debt metrics.

Monitor: Debt-to-equity ratio, PAT trend, and ROCE. If ROCE crosses 12% and debt falls below 4.0, long-term outlook improves.

Key Triggers to Watch

PAT consistently above ₹700 Cr per quarter

ROCE improvement to >12%

Debt-to-equity falling below 4.0

🧠 Final Thoughts

ADANIGREEN is a bold growth story in renewables, but its valuation and debt burden make it a speculative long-term bet. Suitable for aggressive investors who believe in the sector and can tolerate volatility.

Would you like a comparison with other renewable energy players like Tata Power or JSW Energy to evaluate more balanced alternatives?

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