Adani Green shares: Emkay Global sees 72% upside potential; check bull case scenario

Adani Green Energy Ltd's (AGEL's) wholly-owned and step-down subsidiary, Adani Solar Energy Ap Eight Pvt Ltd, has recently commissioned its solar power project of 250 MW at Kadapa, Andhra Pradesh. With this commissioning of this plant, AGEL said its total operational renewable generation capacity has now increased to 12,591.1 MW (around 12.59 GW).

Emkay Global has reiterated a 'BUY' call on the stock due to an attractive valuation and robust growth outlook. "Operationally, FY25 saw an extended and severe monsoon in Khavda, which affected project work, with stabilisation limiting CUF increase. Slowdown in power demand growth in H2 also impacted broader merchant rates. Nevertheless, the management is confident about cumulatively adding 5 GW, and the 2030 target of 50 GW remains intact. AGEL's focus on storage solutions is also increasing with BESS being included in the strategy. It recently won a PSP storage capacity tender of 1.25GW from UPPCL for 40 years, while hybrid MSEDCL and NHPC tender wins also add to the round-the-clock ecosystem," the brokerage stated.

"It also refinanced the $1.06 billion CY21 Rajasthan construction facility through a domestic lender with a 19-year tenor; funding channels are also adequately available for future requirements. We still take a conservative stance and tweak our project phasing, thereby lowering our effective capacity assumptions during FY25-30, besides building in over 50 GW in FY31. We also moderate our CUF and merchant tariff assumptions," it also said.

Emkay, however, reduced its annual EBITDA (earnings before interest, taxes, depreciation and amortisation) estimates by 25-30 per cent each and target price by around 40 per cent to Rs 1,500. Despite this, the suggested target price of Rs 1,500 implied a 71.63 per cent potential upside over Thursday's closing price of Rs 873.95.

In case of a bull run, the broking firm projected an even bigger target of Rs 2,530 for Adani Green shares. For this scenario, Emkay mentioned that the Adani Group firm has to execute its volume targets by FY29-30.

Meanwhile, Indian equity benchmarks will remain closed on Friday to mark Holi celebrations. The 30-share BSE Sensex pack fell 201 points or 0.27 per cent in previous trade to settle at 73,829 and the broader NSE Nifty index lost 73 points or 0.33 per cent to close at 22,397. Domestic benchmarks will resume action on Monday (March 17, 2025).