Despite a steep slump of 59% in a span of five months, Adani Green Energy is now bouncing back strongly in March, having already gained over 15%, fuelled by positive outlooks by several global brokerages that point out the upside as the company continues to play a crucial role in shaping India’s renewable energy transition.
Broking Projections and Market Sentiment
Global investment firm Macquarie has started coverage on Adani Green Energy with an ‘Outperform’ rating and a target price of ₹1,200 per share, implying a 37% upside from current levels. In the best-case scenario presented by Macquarie, the stock could even reach as high as ₹2,600, which represents a potential rally of nearly 200% from the stock’s recent closing levels.
Likewise, Cantor Fitzgerald has come up with coverage with an ‘overweight’ rating and a target price of ₹1,222, reflecting a 40% upside.
What Macquarie Has to Say About Adani Green Energy
Contests Adani Green Energy’s inherent role in the clean energy transition for the country, with a specific target of 50 gigawatts (GW) of renewable capacity by FY2030 as a projection according to its bull-case scenario. The base case, which is more conservative, estimates that the company would achieve 30 GW of capacity through better utilisation rates, advancements at the super site of Khavda, as well as more high-tariff merchant capacities.
In terms of expected earnings, Macquarie believes that Adani Green’s EBITDA is set to grow at a 25% CAGR over the next five years, with its bull-case scenario advocating for a potential 40% CAGR in revenue and EBITDA if the company manages its coveted 50 GW renewable capacity by FY2030. Still, Macquarie cautioned, while Adani Green is assured of comparatively stable cash flows regarding their heavy capital expenditure, funding and refinancing costs are huge risks.
As per Macquarie’s analysis, Adani Green will generate an estimated USD 1.8 billion in annual operating cash flows to support a cumulative capital expenditure of more than USD 10 billion through the fiscal year 2030. The broker expects India’s power demand to grow at a CAGR of 6.0-8.5% in the fiscal years 2025-2030, primarily driven by cooling appliance needs, data centres, electric vehicles, and green hydrogen production.
The Adoption of Cantor Fitzgerald’s Perspective Towards Adani Green Shares
Cantor Fitzgerald reckons Adani Green Energy is an important growth avenue considering that the company maintains a robust growth trajectory as India’s largest renewable energy company, holding 11.6 GW of operational capacity. The broker expects Adani Green’s revenues to grow by 21.3% on the CAGR perimeter from FY2025 to FY2030 and its EBITDA at 25.9% within that scope, reaching USD 3.3 billion by FY2030.
Adani Green Energy, despite the current rising trend, is still trading at 15.6 times its EV/EBITDA estimate for FY2026, slightly less than its peers, even though it has more comparable growth upside. The net debt of the company equals the amount of USD 6.9 billion, but with an improving debt-to-EBITDA ratio of 7.14x, the signs now indicate that it possesses increasing financial stability. It is believed that financial flexibility has enabled Adani Green to fund its expansion through organic cash flow generation and to reduce reliance on external debt.
Performance of the Stock and Market Trends
Regardless of the recent rally, the stock in Adani Green Energy has lost 54% in value since a year ago. The stock went up by 15% in March, but it had suffered a further decline of 22% in February, 4% less in January, and drops of 21%, 17%, and 16% in December, November, and October, respectively.
Adani Green Energy is currently trading lower by 60% from a 52-week high of ₹2,173.65 in June 2024. Nevertheless, it has moved up 15% from its 52-week low, which was hit earlier this month at ₹758.
Should You Buy Adani Green Energy Stock?
Adani Green Energy is one such long-term investment opportunity considering the encouraging recommendations from the global brokerages and India’s strong commitment to renewable energy. With the company forecasting a 50 GW target by FY2030, backed by healthy revenue and EBITDA growth expectations, analysts are looking towards significant upside potential.
However, investors need to consider key risks, including capital expenditure needs, debt amounts, and refinancing costs. The stock is very volatile, and the recovery trajectory will depend on execution, market conditions, and future policy support for renewables.
In a bull-case scenario where Macquarie is projecting returns of up to 200%, Adani Green Energy may be a good bet for a long-term investor eyeing growth in India’s renewable energy sector.
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