In this article, we can analyze Adani Green Energy Ltd as a Potential Multibagger Stock as on August 2023.
Adani Green Energy Ltd
Adani Green Energy Limited is a holding company of several subsidiaries carrying business of renewable power generation within the group and is primarily involved in renewable power generation and other ancillary activities. Gautam Adani is the current Chairman. vneet s. jaain is the current managing director and chief executive officer.
The company is a member of the Adani Group, an Indian diversified industrial conglomerate with seven publicly traded firms with a total market capitalization of USD 206 billion as of April 2022.
The Company has 5,410 MW operational projects and 15,024 MW under construction at the close of FY22.
Power Supply is 75% in FY22 vs 1% in FY18 and Traded Goods is 25% in FY22 vs 94% in FY18.
Funds Raised
The company recently concluded a revolving construction facility of USD 1.6 billion from international banks to address its funding requirement at the construction stage.
Raised USD 750 million through Holdco bond issuance.
Acquisition
During FY22, Adani Renewable Energy (MH) Limited, a wholly-owned subsidiary of the Company completed the acquisition of Vento Energy Infra Private Limited having a 40 MW operating solar project in Odisha with long-term PPA.
Website
Location
Adani Green Energy Limited (AGEL) is an Indian renewable energy company headquartered in Ahmedabad, Gujarat. Currently, the company manages 5,290 MW of wind energy and solar power plants including 46 operational projects in 11 states of India namely Uttar Pradesh, Rajasthan, Punjab, Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh, Andhra Pradesh, Karnataka, Tamil Nadu, and Telangana.
Leaders
Gautam Adani is the current Chairman. He is an Indian billionaire industrialist, who is the founder and chairman of the Adani Group, a multinational conglomerate involved in port development and operations in India. He is India’s biggest airport operator and also controls Mundra Port, India’s largest, in his home state of Gujarat. He became India’s second-largest cement producer in 2022, after acquiring Swiss firm Holcim’s Indian assets for $10.5 billion.
vneet s. jaain is the current managing director and chief executive officer. He is also on the board of 7 other companies. He has been working with the Adani Group for nearly 15 years. He has led many first-of-its-kind projects in the country, driven by his profound technical understanding and sector focus. Under his leadership, Adani Group has executed and set up several key energy projects. One of the World’s largest solar plants, India’s largest solar module manufacturing facility, and India’s first and most extended private owned HVDC transmission network are some of the prominent projects.
Sagar R. Adani is the current executive director. he is responsible for achieving the Group’s vision. He aims to build the Group’s identity around an integrated business model, backed by his sound understanding of new processes, systems, and macroeconomic issues, coupled with his growing experience. He is on the board of 4 other companies.
Rajesh Adani is the current director. He is in charge of the operations of the Group and has been responsible for developing its business relationships. His proactive, personalized approach to the business and competitive spirit have helped the growth of the Group and its various businesses.
Highlights
The company has recorded revenue from operations to the tune of H7,792 Crore during the financial year 2022-23 (FY 2022-23) compared to H5,133 Crore in the corresponding previous financial year. During the year, your Company generated earnings before interest, depreciation, and tax (EBITDA) of H5,772 Crore compared to H3,954 Crore in the previous
year.
Company has one of the world’s largest renewable portfolios, with locked-in growth of 20.4 GW across operational, under-construction, awarded and acquired assets, catering to investment-grade counterparties. Your Company develops, builds, owns, operates, and maintains utility-scale grid-connected solar and wind farm projects. AGEL is focused on decarbonization of power generation and is helping India meet its sustainability goals. Mercom Capital, the US-based think tank has ranked Adani Group as the #1 global solar power generation asset owner. AGEL has also been awarded as Global Sponsor of the Year by Project Finance International (PFI) recognizing AGEL as a key driver of energy transition.
Subsidiaries
- Adani Renewable Energy Thirty Five Limited
- Adani Renewable Energy Thirty Six Limited
- Adani Renewable Energy Thirty Seven Limited
- Adani Renewable Energy Forty Limited
- Adani Renewable Energy Forty One Limited
- Adani Renewable Energy Forty Two Limited
- Adani Renewable Energy Forty Three Limited
- Adani Renewable Energy Forty Four Limited
- Adani Renewable Energy Forty Five Limited
- Adani Renewable Energy Forty Seven Limited
- Adani Renewable Energy Forty Eight Limited
- Adani Renewable Energy Forty Nine Limited
- Adani Green Energy SL Limited
Awards
- The company won the prestigious Platinum Environment Award at Grow Care India Environment Management Awards 2022.
- Won ‘Leaders Award’ at the Sustainability 4.0 Awards, conferred jointly by Frost & Sullivan and TERI
- Won the prestigious ‘Platinum’ Environment Award at Grow Care India Environment Management Awards 2022.
- Won the ‘Leaders Award’ at the Sustainability 4.0 Awards, conferred jointly by Frost & Sullivan and TERI.
- Won the prestigious ‘Platinum’ Environment Award at Grow Care India Environment Management Awards 2022.
Products & Services
- Solar Power
- Wind Power
- Hybrid power
- Solar parks
Profit & Loss
Expansions
- During FY22, the Company completed the acquisition of ~5 GW of the renewable energy portfolio of SB Energy spread across four states in India through its SPVs for a fully completed enterprise value of Rs. 26,000 cr.
- Further, it added 1,940 MW of operational capacity in FY 22 (greenfield commissioning 200 MW and inorganic addition of 1,740 MW).
- There was a 3x expansion in the overall shareholder base to 7.5 lakh shareholders.
Positives
- Company is expected to give good quarter
- Company has delivered good profit growth of 61.0% CAGR over last 5 years
- Debtor days have improved from 136 to 103 days.
- Company’s working capital requirements have reduced from 69.3 days to 27.4 days
- Sales growth is growing at healthy rate in last 3 years 45.13%
- Net Profit is growing at healthy rate in last 3 years 49.52%
- Debt to equity has declined versus last 3 years average to 9.23
- Sales growth is good in last 4 quarters at 42.82%
Negatives
- Stock is trading at 20.6 times its book value
- Though the company is reporting repeated profits, it is not paying out dividend
- Company has low interest coverage ratio.
- Promoter holding has decreased over last quarter: -0.99%
- Company might be capitalizing the interest cost
- Return on Equity has declined versus last 3 years average to 18.00%
Warren Buffett Checklist
| Factor | Value |
| Economic Moat | Good |
| Growth | Good |
| Valuation | Bad |
| Debt | Bad |
| Integrity | Moderate |
Summary
Based on above evaluation the company have multibagger properties.
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