Adani Green shares fell 4% to Rs 1,211 on the BSE on Thursday, October 22, after the renewable energy company reported second-quarter consolidated net profit of Rs 673 crore, up 15% from a year earlier. Revenue grew faster than profit, while brokerage assessments highlighted both expansion opportunities and transmission constraints.

Key Takeaways

  • Quarterly revenue from operations rose 39% to Rs 4,520 crore, supported by new renewable energy projects.
  • Jefferies retained Buy earlier in October with a Rs 1,695 target; JM Financial maintained Add with a Rs 1,374 target after the results.
  • Battery storage expansion supported the growth outlook, while JM Financial flagged weaker grid availability amid transmission delays.

Table of Contents

Adani Green shares retreat despite higher earnings

Consolidated net profit increased from Rs 583 crore in the corresponding quarter a year earlier. The main power-supply business generated revenue of Rs 4,019 crore, up 45% from Rs 2,776 crore, as new solar, wind and hybrid projects were commissioned.

Power-supply EBITDA climbed 51% to Rs 3,835 crore from Rs 2,543 crore. The segment's EBITDA margin was 92%, compared with 90.5% a year earlier.

JM Financial's assessment used a power-supply EBITDA margin of 91% for Q2FY27, against 87% in Q2FY26, 90% in Q1FY27 and the brokerage's 89% estimate.

Jefferies points to demand and storage expansion

Jefferies' Buy rating and Rs 1,695 price target were reiterated earlier in October, rather than presented as a response to the latest results. The brokerage cited reasonable valuations following a 22% decline from the stock's peak.

It valued the company at around 20 times one-year forward enterprise value to EBITDA, which it considered attractive against its projected 30% EBITDA compound annual growth rate between FY26 and FY30. Rising power demand, better utilisation at Khavda and battery storage growth underpinned its view, despite concerns about higher interest costs following the Reserve Bank of India's rate hike.

Jefferies highlighted the possibility that El Niño conditions could persist into 2027, potentially increasing temperatures and power shortages. It also pointed to coal stocks below seven days and discussions by state electricity boards about securing power for 2027.

Installed battery energy storage capacity stood at 6.6 GWh, with plans to exceed 10 GWh by the end of FY27. Jefferies saw scope for faster storage expansion and potential upside to its forecast of annual generation capacity additions of 6.5–6.8 GW during FY28–FY30.

JM Financial flags transmission constraints

JM Financial retained its Add rating and Rs 1,374 target after results it described as largely in line with expectations. It said delays in transmission lines had weakened grid availability.

Solar grid availability declined to 78.9% in H1FY27 from 89% a year earlier, while wind availability fell to 93.7% from 97.4%. Hybrid availability improved to 94.5% from 89%.

Adani Green incurred Rs 16,000 crore in capital expenditure during H1FY27, alongside debt drawdowns of Rs 13,700 crore.

Conclusion

The share decline followed higher quarterly profit and revenue. Both brokerages retained positive ratings, but their assessments also highlighted execution constraints and financing costs alongside the company's renewable energy and storage expansion.

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