Brokerages Axis Capital and Elara Capital initiated coverage on Adani Green Energy on Friday, citing the company's ambitious plan to expand renewable energy capacity to 50 GW. According to reports from The Economic Times, Axis Capital assigned a target price of ₹1,704 while Elara Capital set a target of ₹1,502, indicating potential upside of up to 23% for the stock. The firms see up to 23% upside backed by robust capacity additions, improving cash flows and India's accelerating clean energy transition.
As reported by Axis Capital, the company estimates a capex requirement of ₹2.1 lakh crore for its expansion plans, which would be fully met through internal accruals with room for stronger growth. The brokerage projects that Adani Green Energy's net debt to EBITDA ratio would improve to 4.7x by FY32 from 8.4x in FY26. The company is expected to generate operating cash flow of over ₹20,000 crore, enabling >12 GW per annum capacity additions. According to Axis Capital, this strong financial position supports the company's ambitious growth targets.
According to Axis Capital's analysis, Adani Green Energy's strategic tie-up with Adani Energy Solutions reduces exposure to merchant price volatility and offers reasonable returns on BESS projects compared with a tightly bid market. The company's portfolio is concentrated in resource-rich regions of Khavda in Gujarat and Rajasthan, with the Khavda land parcel having potential of around 42 GW, of which Adani Green Energy holds 30 GW. However, the brokerage estimates a one-year delay in achieving its FY30 target of 45 GW RE, 50 GWh BESS and 5 GW pumped storage plants due to transmission connectivity delays. The strategic partnership strengthens cash flow visibility and positions the company well for India's accelerating renewable energy transition.
As reported by Elara Capital, Adani Green Energy plans to expand its energy storage business by scaling BESS capacity from around 3.4 GWh currently to around 10 GWh by FY27, while targeting 50 GWh of storage capacity and 5 GW of pumped storage capacity by FY30. The brokerage expects strong demand from the commercial and industrial segment, particularly from data centres, with the company planning to operate part of its BESS portfolio under a merchant model in the near term. According to Elara Capital, the company's strong execution capabilities support rapid capacity additions, reinforcing its market leadership position. Battery storage and the pumped hydro portfolio would enable greater renewable integration and strengthen future growth visibility.
According to Axis Capital's analysis, global peers are trading at 13x one-year forward EV/EBITDA despite visibility of a 9% EBITDA CAGR over CY25-28E and an average net debt-to-EBITDA ratio of 4.7x. In comparison, Adani Green Energy's net debt-to-EBITDA ratio is expected to be around 4.7x by FY32, supported by stronger growth visibility, robust cash flows and the significant renewable energy opportunity in India. However, Elara Capital notes that delays in project execution and grid transmission commissioning remain key risks to the investment thesis. The company is well positioned to capitalise on India's accelerating renewable energy transition with its strong financial position and strategic partnerships.
