Buy Adani Green Energy; target of Rs 1700: Emkay Global Financial

Moneycontrol • 5 days ago

Original source

Key Investment Pillars

  • Adani Green Energy's (AGEL) 2QFY27 EBITDA rose 46% yoy, driven by 24% yoy growth in operational capacity to 20.8GW and better realizations.
  • The company is accelerating BESS deployment as a strategic hedge against evacuation constraints, targeting to surpass 10GWh by FY27-end.
  • AGEL retains its FY27 RE capacity addition guidance of 4.5–5GW, subject to the Phase III transmission corridor becoming available in 4QFY27.
  • The company's focus on securing long-term returns from creditworthy counterparties, with a targeted ROA of 13–14%, supports the investment thesis.

Thesis Validation Checklist

  • Investors should watch for the commissioning of the 7GW transmission corridor in 4QFY27, which will provide AGEL with its required GNA connectivity and address existing curtailment.
  • Accelerated BESS deployment should reduce the curtailment impact in 2HFY27 vs 1HFY27, supporting the company's growth.
  • The company's ability to execute large BESS projects within ~8–10 months and its plans to deploy ~10GWh of BESS by FY27-end will be key to mitigating transmission delays.
  • Investors should monitor the company's leverage, which is expected to remain around the current ~5.6x level through FY28–29, before declining as the major capex program is completed and the operating portfolio expands.