Shares of Adani Green dipped 4% to Rs 1,211 on the BSE on Thursday after the company reported a 15% year-on-year (YoY) growth in its consolidated net profit at Rs 673 crore in the second quarter. The same stood at Rs 583 crore in the same quarter of last year. Revenue from operations increased 39% YoY to Rs 4,520 crore.
Segment-wise, revenue from power supply, the company's main business, increased 45% YoY to Rs 4,019 crore from Rs 2,776 crore, driven by the commissioning of new solar, wind and hybrid projects. EBITDA from power supply surged 51% to Rs 3,835 crore from Rs 2,543 crore, while the EBITDA margin improved to 92% from 90.5% a year earlier.
Buy, sell or hold the stock?
Earlier this month, Jefferies retained its ‘Buy’ rating on Adani Green Energy, and assigned a target price of Rs 1,695 citing reasonable valuations after a 22% correction from the stock's peak. The brokerage believes rising power demand, improving utilisation at its Khavda project and the company's expanding battery storage business could support growth despite concerns over higher interest costs following the Reserve Bank of India's rate hike.
Jefferies said Adani Green trades at around 20 times one-year forward EV/EBITDA, which it considers attractive given the company's projected 30% EBITDA compound annual growth rate between FY26 and FY30.
Jefferies sees higher electricity demand and improved utilisation as key triggers for the renewable energy company. It highlighted the possibility of El Niño conditions continuing into 2027, potentially bringing higher temperatures and renewed power shortages. Coal stocks are already at critical levels of less than seven days, while state electricity boards are discussing locking in power for 2027.
Adani Green is also expanding its battery energy storage solutions (BESS) business. Its installed storage capacity stands at 6.6 GWh, with plans to exceed 10 GWh by the end of FY27. Jefferies believes this expansion could accelerate amid strong power demand and sees potential upside to its forecast of 6.5-6.8 GW in annual generation capacity additions during FY28-FY30.
JM Financial has retained its Add rating on Adani Green Energy with a target price of Rs 1,374 after the company reported results largely in line with expectations. The EBITDA margin on power supply stood at 91% in Q2FY27, compared with 87% in Q2FY26 and 90% in Q1FY27, against the brokerage's estimate of 89%.
It said grid availability weakened amid delays in transmission lines. Solar, wind and hybrid grid availability stood at 78.9%, 93.7% and 94.5%, respectively, in H1FY27, compared with 89%, 97.4% and 89% in H1FY26. Adani Green incurred capital expenditure of Rs 16,000 crore in H1FY27, alongside debt drawdowns of Rs 13,700 crore.
Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.