Adani Green Energy Ltd (AGEL) has demonstrated exceptional growth, with its operational renewable energy (RE) capacity expanding at an impressive 41% compound annual growth rate (CAGR) over the past five years, according to a report released by brokerage firm Emkay Global on Monday.
Emkay Global has initiated coverage on AGEL with a ‘buy’ recommendation and set a target price of Rs 2,550 per share, reflecting a potential upside of over 50% from current levels.
The brokerage firm anticipates continued strong growth for AGEL, driven by its strategic asset base and substantial potential in the renewable energy sector.
The company has secured extensive sites for solar and wind projects in Gujarat and Rajasthan, with a combined capacity exceeding 50GW, along with over 5GW dedicated to pump storage solutions and evacuation.
Emkay Global: AGEL’s Future Focus On Gujarat-Rajasthan Supersites
Emkay Global highlights that AGEL will focus its future momentum on Gujarat-Rajasthan supersites, particularly Khavda, which holds 67% of the company’s capacity.
These sites are among the most resource-rich globally and are likely to be key drivers of AGEL’s revenue growth, projected at a 35% CAGR from FY24 to FY30.
The report further notes that while AGEL’s balance sheet is likely to expand, its leverage ratios are likely to improve significantly, with net debt-to-EBITDA anticipated to drop from 7.4 times to 3.6 times.
AGEL benefits from a diversified capital pool, including $3.4 billion in revolving construction facilities from banks and access to favorable long-term global bond markets.
Analysts expect AGEL’s cost of debt to decrease gradually, supported by global best practices and funding partnerships.
The company is however projected to achieve an operational RE capacity CAGR of 31% to 56.5GW by FY30, driven by the development of the Khavda supersite, which aims to expand to 30GW by FY29.
The report also anticipates improvements in capacity utilization factors (CUF) for solar and wind projects, with solar CUF increasing from 24.5% to 30.3% and wind CUF from 29.4% to 34% by FY30.
The growing share of high-yield assets and advancements in module technology drive these enhancements.
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