The brokerage has initiated coverage on the stock with an ‘Overweight’ rating, and a price target of ₹1,222, which implies a potential upside of 40% from Thursday’s closing levels. Friday was a market holiday due to Holi celebrations.
The brokerage wrote in its note that Adani Green Energy is a renewable energy company that develops, owns, and operates solar, wind, and hybrid (solar + wind) power plants across India.
Currently, the Adani Group company has a power portfolio totaling 11.6 GW, making it the largest renewable energy company in India.
For a country that is very focused on reducing carbon emissions to reach net-zero, increased renewable energy capacity is at the core of this goal. The brokerage believes this makes for a compelling investment case for AGEL, the note added.
Cantor Fitzgerald has also initiated coverage on Adani Power Ltd. with an ‘Overweight’ recommendation.
Cantor Fitzgerald’s price target of ₹595, implies a potential upside of 16% from the stock’s last closing levels.
The brokerage said that Adani Power is an owner and operator of 11 thermal power plants and one solar power plant in India.
With effective capacity of 17.5 GW, it is the largest privately owned thermal power generator in India, and the first player to use more advanced supercritical technology.
What makes APL interesting is its combination of growth (an expected addition of 12.5 GW of capacity over the next five years), balance sheet flexibility (its lowest leverage in several years), and the view that India will continue to rely on thermal power as its economy grows and matures.
With valuation being quite reasonable, the brokerage said it likes the risk-reward portfolio at current levels.
Of the six analysts tracking Adani Green Energy, five of them have a ‘Buy’ rating on the stock, while one has a ‘Sell’ rating. On the other hand, out of the four analysts that have coverage on Adani Power, all four of them have a ‘Buy’ rating on the counter.
On Thursday, shares of Adani Green Energy settled 2.41% higher at ₹873.95, while the Adani Power stock closed at ₹511.95, down 0.10%.
