Emkay has come out with an initiating coverage on Adani Green Energy Ltd, with a target price of Rs 2550—50% upside. Revenues CAGR of 35% from FY24-FY30 – Gujarat (Khavda) and Rajasthan sites (most resource-rich sites globally) will help AGEL grow its revenues at 35% CAGR, giving a clear runway of another 50 GW, plus another 6.5 GW with pump storage solutions and evacuation visibility.
Capacity Utilization Factor to improve as the new sites are resource-abundant to increase output volume, A higher share of merchant and commercial and industries (CI) to improve realizations.
EBITDA and PAT CAGR of 38% and 61% from FY24-FY30, from higher utilization, Cost Optimization and higher realization share of merchant and Commercial and Industries(CI) segment to drive EBITDA and net profit by Balance Sheet to improve drastically, net debt to EBITDA to fall to 3.6x from 7.4x despite expansion as the cashflows from existing projects will provide majorly for future expansion.
Valuations: The brokerage has valued AGEL at a conservative 15x FY30E EV/EBITDA and arrived at a price target of Rs 2550 – 50% upside from current levels.