Adani Green Energy Stock Analysis | Multibagger returns in 1 year | Fundamental Analysis


Such a share whose share price in February 2019 was just Rs 30 If I talk about January 2020, It share price increased from Rs 30 to become Rs 232 Which means that this share in the past year Gave a return of about 600% And the name of this share is Adani Greens Energy ltd Today we are going to do a stock analysis on Adani greens energy ltd In which we will tell you how this share performed in the past year And should you invest in this share in the coming time or not I, Jagdeep Singh, welcome you to the Groww channel Let us start today’s video on Adani greens I always tell you that whenever you choose a share you should see how that industry is going to perform And you know that in the past there was a lot of talk about renewable energy And a lot of companies were thinking of investing here And apart from this if I talk about the government then the government as well was putting a lot of pressure on these companies That they should move forward towards renewable energy Because of which there were a lot of investment opportunities in this sector regarding this So if someone would have identified this in the early days Then in the past year by investing in this, they would have made a lot of money First we will talk about what renewable energy is So you know that whenever any country goes towards development the most important thing is energy Because every country needs energy a lot Which they fulfil in two ways, first Non renewable energy, like coal, petroleum, they derive energy from this The second is non-renewable energy As you know in the past 1-2 years there is a lot of discussion on renewable energy And there is a lot of pressure on a lot of countries That they have to move their energy demand from non-renewable energy to renewable energy If I talk about the difference between non-renewable and renewable So non-renewable energy is made from those things that emit pollution And you cannot use those raw materials again In the same way if I talk about renewable energy So that comes out of air, solar From those things through which there is no negative effect on our environment And the energy needs of one country is fulfilled properly So if I talk about India, then it is a developing country Which, until now, was completely dependent on non renewable energy If I talk about the installed capacity of renewable energy in India That was, until March 2012, only 25 Gigawatt Which now, in March 2019, has increased to become 78.5 Gigawatt So you can see how much development has taken place in the renewable sector in the past few years So if I tell you a very interesting fact That the Indian government has an objective that by the financial year 2022 That the energy that comes out of renewable energy they want to increase it from 78.5 Gigawatt And take it to 175 Gigawatt So this is a very big number for which a lot of companies have to work a lot And in actuality if the government is able to achieve this number, then to achieve this number The government has to incentivise this sector in many ways Maybe the benefit of which Adani greens will get a lot Because of which a lot of investors started investing in this share and the price of this share went up So Adani greens has said that the objective of the government that by financial year 2020 The 175 Gigawatt energy that has to come out of renewable energy They have aligned their target according to that And they said they will contribute a lot to meet the government’s objective Because of which we get to know that this company is thinking of expanding a lot in the coming time First let us see where the power plants of Adani greens are spread And how well they are distributed in India As you can see on my screen, I have taken this screenshot from the financial statement of Adani green And this tells us Adani Greens’, in different regions of India Where are the wind, solar and hybrid plants And of how many are operational and how many are under implementation So operational, the ones that are still working And under implementation, the ones that will work in the coming time So looking at this screen we can find out that the plants of adani greens are very well spread out in India If I talk about from the north until the south And from the west until the east they cover the entirety of India very well And we also find out that the power plants under implementation They are also in a large scale As you can see that in Gujarat a plant of 1725 is under implementation If it becomes opertional in the coming time So it will contribute to their PnL and their profit very well So after all this comes the topic of how financially strong this company is Because whenever we think of investing in this company So first we think of doing the valuation of the company We want to see how much value is there in that company And how strong that company is financially So let us do the financial analysis of this company So whenever we talk about the financials of any company it is very important to see what the profit of the company is If I talk about the profit of Adani greens and how much profit they made in September 2019 So in September 2019, Adani greens made a profit of 100 crores But whenever you look at the profit of any company in any quarter You should always see how that company performed in the same quarter last year So if I talk about how Adani greens performed in the quarter of September 2018 That time this company was a loss making company That time the loss of this company was -188 crores Which means that in one year, the company that in one quarter used to give a loss of 188 crores In this quarter they gave a profit of 100 crores So in this particular area this company has performed very well in the past year Apart from this if I tell you a little about its sales So in March 2017 the sales of this company was 500 crores If I talk about March 2019, its sales has increased to become 2000 crores Which means that this company’s sales in two years has increased 4 times which is a very good number I told you about the price of this company and its earnings Now you must want to know the P/E ratio of this company Because retail investors like you and I look a lot at How much the P/E ratio of a company is So if I talk about the P/E ratio of this company, then it is around 760 Which is a very big number So if we compare it to the industry then this company’s P/E ratio is very high But their P/E ratio is high because until now this company was a loss making company And whenever a company is a loss making company, their P/E ratio doesn’t exist because their earning is 0 But currently this company has started making a little earnings So if you’re thinking of investing in this company keeping growth in mind So a good rationale is made But if you’re thinking of value, then there isn’t a lot of value in this company depending on its earnings And depending upon its other factors Apart from this when we talk about financial statement a very important thing is how much debt there is on a company Because I always tell you to avoid those company on whom there is a lot of debt But you can’t always take debt negatively Because if any company expands itself well Then for them, taking debt can be good as well So we will talk about how much debt Adani greens has So if I talk about the debt level of Adani greens then their debt level is more than 11,000 crores So whenever you talk about debt you have to compare it to last year whether they reduced or increased it So if I talk about the debt of Adani greens So in March 2017, their debt was around 4500 crores Which increased to become 9800 crores in 2018 Which has now increased to become 11000 crores So their debt level is a lot as compared to their earnings and their profit Just by looking at the debt level and investing in a company is also very wrong Because it is possible that right now a company has a very high debt level But that company in the coming time is going to grow a lot Because of which their profit in the coming time can increase a lot And through which they can reduce their debt in the coming time So whenever you thinking of investing anywhere You should look at all the factors at one time and then decide whether you should invest or not After this there is another very important factor, cash flow from operations Which tells us how much cash this company made from its operations This calculates how much cash came into the company and how much went out And normally you should see that the company you’re thinking of investing in Their operating cash flow should be positive So if I talk about the cash flow from operations of Adani greens then in March 2018, Their cashflow was 650 crores Which has now increased to become more 1600 crores Which means their cashflow from operating activities is now positive And has increased very well in the past year Which tells us a very positive point about this company Now let us talk about shareholding pattern What percent of holdings do the promoters have in this company So if I talk about Adani Greens then the promoter holding is around 74% Which is a good number which tells us that the promoters believe in this company a lot But here there is another flag which you have to look at very carefully Whenever you look at the shareholding pattern in any company you should also look at the pledge percentage Pledge tells us how much of the money of the promoters have they kept as mortgage And against that they have taken a loan or money So if I talk about Adani greens Here the promoter holding is 74% But from that around 54% the promoters have pledged the money Which is a very big number And you should see whether the promoter pledge reduces in the coming time or not So this was the fundamental analysis on Adani greens But now a lot of investors say they are unable to buy this share Because whenever I put an order on this share, my order gets rejected And even when I try to sell it, why does my order get rejected? So if I talk about Adani greens, their upper and lower circuit is defined at 5% Now you must be thinking what upper and lower circuit is So exchange, a lot of time defines the circuit of a share that the price of this share cannot go above this circuit Like if I give you a very simple example That one share trades at Rs 100 And exchange has said that its exchange limit is 5% Which means that the price of this share in one day cannot go above 105 and below 95 And whenever the price increases and reaches 95 Then the trading stops And after this it cannot trade because its circuit is defined So many times in the case of Adani greens it happens That Adani greens is either in the upper circuit Which means that if its share price goes up by 5% After which the trading in it stops And because of which whenever you try to put in a buy order, your buy order gets rejected And a lot of times it happens that Adani greens hits the lower circuit Which means that its share price in one day hits lower than 5% And after that the trading stops in it So whenever you try to make a sell order, it gets rejected Because there is no buyer there And whenever there isn’t any buyer for a company in the market You order gets rejected and comes back So whenever you think of investing in this company You should see where Adani greens is trading on that day And if you think that day the share is going 5% higher It hits the upper circuit and at the time the trading stops And the same thing happens when the share goes 5% down So this video that we made on Adani Greens was purely for educational purposes We absolutely do not give the recommendation of the buying and selling of any shares And if you haven’t yet subscribed to our channel Then please subscribe to the Groww channel Because we put 2-3 videos every week for educational purposes Which can help you become a very good and intelligent investor If you liked this video, press that like button Subscribe to our channel and comment and let us know Are you thinking of investing in Adani greens? If you are, what is the reason behind that? Happy investing!

Leave a Reply

Your email address will not be published. Required fields are marked *