 "Macquarie sees 40% upside in Adani Green stock, gives 'Outperform' rating")
Shares of Adani Green Energy could rally another 40 per cent, Macquarie Equity Research said while initiating coverage, citing the leading role the company is taking in India's energy transition.
The research firm initiated coverage with an 'Outperform' rating on the stock and a target price of Rs 1,200 per share. Under its bull case scenario, Macquarie sees the shares go up as much as Rs 2,600 apiece, a potential rally of nearly 200 per cent from Wednesday's close.
The Adani group company is "leading India's energy transition" with a targeted 50-gigawatt capacity by the financial year 2030, Baiju Joshi, analyst at Macquarie said in a recent note. In its base case, the brokerage assumes a more conservative pathway to 30 gigawatt (Gw) of renewable energy capacity by fiscal 2030. This involves steady improvements in utilisation rates driven by technological advancements, particularly the Khavda super-site, and an increasing share of higher-tariff merchant capacities. As a result, the firm is expected to deliver a 25 per cent CAGR in Ebitda over the next five years, according to the brokerage.
In a bull-case scenario, Gautam Adani's green arm achieves its target of 50 Gw, resulting in a 40 per cent CAGR in revenue and Ebitda. This is contingent on the successful execution of its growth strategy, Macquarie said.
India's overall power demand could rise at a 6.0-8.5 per cent CAGR in fiscal 2025-30E, assuming 1.2 times GDP growth. Incrementally higher demand from cooling appliances, data centres capacity expansion, higher EV penetration and higher green hydrogen production are factors that might aid this growth, the report said.
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Adani Green's heavy capex is backed by steady cash flows, according to Macquarie. "We expect AGEL to generate $1.8 billion annual operating cash flow against a cumulative capex requirement of over $10 billion through fiscal 2030. The cost of funding and refinancing as key risks in the business are the key risks to Macquarie's research.
This comes as Adani Green recently announced that its wholly-owned step-down subsidiary, Adani Solar Energy Ap Eight, has commissioned a 250 Mw solar power project at Kadapa, Andhra Pradesh. With the commissioning of this plant, AGELs total operational renewable generation capacity has increased to 12,591.1 Mw.
Adani Green Energy is a renewable energy company based in India, part of the Adani Group. It focuses on generating power through renewable sources such as solar and wind energy. It is involved in developing, operating, and maintaining renewable energy projects and aims to contribute significantly to the global transition to clean energy.
Shares of Adani Green rose as much as 5.1 per cent during the the day to Rs 858 per share. The stock pared gains and was trading 2.4 per cent higher at Rs 874 apiece, compared to a 0.16 per cent fall in Nifty 50 as of 11:40 AM. The counter has fallen by 15 per cent so far in 2025 following an 34 per cent decline it made in 2024.