Adani Green Energy shares set for a 75% upside despite weak Q3 earnings; here's why 

Shares of Adani Green Energy, which crashed 17% last week, attempted a partial recovery in the current session after brokerages sounded upbeat on the prospects of the Adani Group firm despite weak Q3 earnings. Apart from earnings, investor sentiment was also negative last week as US Securities and Exchange Commission sought court's nod to send summons to billionaire Gautam Adani and group executive Sagar Adani over an alleged fraud. 

However, the stock rose 6% to Rs 818.45 in early deals today. Market cap of the firm rose to Rs 1.30 lakh crore. 

Brokerage JM Financial said management was confident on earnings recovery as generation normalises and curtailment issues resolve in the coming quarters. 

Assigning a buy call to the stock, the brokerage sees an upside of 56% at Rs 1204 against the previous close of Rs 772.10. 

It estimates the Adani Group firm to deliver a revenue/ EBITDA/ PAT CAGR of 27%/ 29%/36% over FY25-28E. 

It has revised its target price to Rs 1,204/share valuing at 14x FY28E EBITDA considering the execution challenges, curtailment and cost inflation risking the earnings growth.

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Emkay Global Financial Services has a lowered its price target to Rs 1350 (a 75% upside) against the earlier Rs 1,500 on the Adani stock post Q3 earnings. 

"We largely retain FY27-28E earnings, but lower FY26E EBITDA by 14%, factoring in the 9MFY26 run-rate and curtailment challenges. We roll forward to December-26Estimates, cutting our TP by 10% to Rs 1,350 from Rs 1,500 at 12x EV/EBITDA (13x earlier); retain BUY," said Emkay. 

ICICI Securities too has pared its target price to Rs 1140 (earlier Rs 1,290). 

Adani has the strongest track record of developing renewables portfolio. It also has the resources to develop up to 30GW at a single location in Khavda. It has been miles ahead in the competition. The company has a capex to EBITDA ratio of close to 7.5x, indicating high capital efficiency. 

"We have cut our multiple to 15x from 16x previously, factoring in the softness in generation. Overall, the multiple of 15x bakes in 1) AGEL’s strong track record of execution, with 17.2GW of operational capacity; 2) superior capital efficiency; 3) access to funds; and 4) quality solar and wind resources on a large scale. We maintain BUY with a revised target price of Rs 1,140 (earlier Rs 1,290)," said ICICI Securities.

In Q3 of this fiscal, net profit crashed 99% to Rs 5 crore against Rs 474 crore in the December 2024 quarter. However, total income in Q3 rose to Rs 2837 crore against Rs 1993 crore in the corresponding period of the previous fiscal. 

Revenue from operations rose 11.9% to Rs 2618 crore in Q3 against Rs 2072 crore in the year ago period. EBITDA rose 19.2% to Rs 2241 crore.