Emkay Global has retained its 'Buy' rating on Adani Green Energy Ltd, even as it has trimmed its FY25 Ebitda estimates by 7 per cent to reflect H1 run-rate, while largely retaining FY26-27 Ebitda.
"We value AGEL at 15 times FY30E EV/Ebitda, discounted at 12 per cent (CoE) to Sep-25E which is reasonably conservative and backed by the 30-60 per cent revenue-earnings CAGR. We reduce FY25E AEPS 35 per cent due to minority interest adjustment, although over the long term, the impact is not significant (2 per cent on target price)," it said while suggesting an unchanged target price of Rs 2,550 on Adani Green Energy.
The Adani group firm's consolidated Q2 Ebitda rose 25 per cent YoY, led by stable operating performance and a jump in equipment sales. Consolidated PAT after minority interest and share from associates-JVs came in at Rs 276 crore in Q2FY25, down 26 per cent YoY due to jump in minority interst to Rs 240 crore from asset transfer to Total JV.
"Net debt rose 9 per cent H-o-H to Rs 58,200 crore as of Sep-24-end. The management estimates 2GW/4GW RE capacity to get commissioned in Q3FY25/March 2025, besides the annual RE capacity addition target of over 6GW. It also guided to an annualised Ebitda run-rate of Rs 10,800/16,000 crore for current 11.2GW/17GW FY25-end capacity," Emkay said.
AGEL reported Q2FY25 consolidated revenue of Rs 3,060 crore, up 38 per cent. Core power supply revenue rose 16 per cent YoY but fell 9 per cent QoQ to Rs 2,310 crore due to seasonality. Share of merchant and infirm power rose to 25 per cent against 22 per cent QoQ.
Book realisation was stable at Rs3.4 per kwh in Q2FY25. Power supply Ebitda was up 17 per cent YoY at Rs 2,140 crore with Ebitda margin steady at 93 per cent. Finance cost fell 5 per cent QoQ. There was forex gain of Rs 67 crore, while exceptional loss stood at Rs 97 crore, of which Rs 60 crore was written-off legal & professional cost with respect to a bond issuance that was called off.
"The management KTAs 6GW capacity addition in FY25 would have 1GW wind (80 per cent of which would be merchant) and 5GW solar. It has already commissioned 250MW wind capacity at Khavda in FY25. AGEL has seen wind CUFs of over 44 per cent in the last two months and forecasts wind CUFs of over 35 per cent in FY25. Khavda solar CUFs are likely to be over 32 per cent from FY26 onwards and it would help to improve current overall solar CUFs from 24 per cent," Emkay Global said.
The broking firm said the power evacuation infrastructure remains key for Adani Green Energy and there is clear visibility on the same for the next 2-3 years. The Google C&I opportunity is expected to commence in Q3CY25 and its tariff is significantly higher than current PPA, it said.
"AGEL is working toward BESS opportunities (where costs are down), and they could materialise by FY26," Emkay added.