Adani Green Energy Ltd is Rated Strong Sell

Current Rating Overview

MarketsMOJO’s Strong Sell rating on Adani Green Energy Ltd indicates a cautious stance for investors, signalling significant concerns across multiple key parameters. The rating was revised on 05 January 2026, reflecting a decline in the company’s overall Mojo Score from 37 to 27. This score places the stock firmly in the Strong Sell category, suggesting that investors should consider reducing exposure or avoiding new positions at this time.

Here’s How the Stock Looks Today

As of 09 January 2026, Adani Green Energy Ltd’s financial and market data reveal several challenges that underpin the current rating. The company’s market capitalisation remains in the largecap segment within the power sector, but its recent performance and financial health raise concerns.

Quality Assessment

The quality grade assigned to the company is below average. This reflects structural weaknesses in its business fundamentals. Adani Green Energy Ltd is classified as a high debt company, with an average debt-to-equity ratio of 8.01 times. Such a high leverage level increases financial risk and limits flexibility in capital allocation. Furthermore, the company’s return on capital employed (ROCE) averages 6.78%, indicating low profitability relative to the capital invested. This modest ROCE suggests that the company is generating limited returns on its equity and debt, which is a concern for long-term value creation.

Valuation Considerations

Valuation metrics currently classify the stock as very expensive. Despite the stock trading at a discount relative to its peers’ historical averages, the enterprise value to capital employed ratio stands at 2.4, which is high given the company’s modest profitability. The price-to-earnings growth (PEG) ratio is 1.3, reflecting that the market is pricing in growth expectations that may be optimistic given the company’s recent financial trends. Investors should be wary of paying a premium for a stock with such financial and operational challenges.

Financial Trend Analysis

The financial grade is flat, signalling stagnation rather than improvement. The latest quarterly results show a significant decline in profitability, with profit before tax less other income falling by 57.8% compared to the previous four-quarter average. Interest expenses have increased by 20.66% over the last six months, further pressuring earnings. The half-year ROCE is at a low 7.42%, reinforcing the subdued profitability trend. Although profits have risen by 62.8% over the past year, the stock’s returns have been disappointing, with a 1-year return of -0.69% and consistent underperformance against the BSE500 benchmark over the last three years.

Technical Outlook

The technical grade is mildly bearish, reflecting recent price action and momentum indicators. The stock has declined by 1.8% on the day of analysis and has shown negative returns over multiple time frames: -6.53% over one week, -2.86% over one month, and -7.62% over three months. This trend suggests that market sentiment remains weak, and technical signals do not currently support a near-term recovery.

Implications for Investors

The Strong Sell rating from MarketsMOJO is a clear indication that investors should exercise caution with Adani Green Energy Ltd. The combination of high leverage, weak profitability, expensive valuation, and negative technical signals suggests that the stock faces considerable headwinds. Investors seeking exposure to the power sector may want to consider alternatives with stronger fundamentals and more favourable valuations.

Summary of Key Metrics as of 09 January 2026

• Mojo Score: 27.0 (Strong Sell)


• Debt to Equity Ratio (avg): 8.01 times


• Return on Capital Employed (avg): 6.78%


• Enterprise Value to Capital Employed: 2.4


• Profit Before Tax less Other Income (latest quarter): ₹134 crores, down 57.8%


• Interest Expense (last six months): ₹3,160 crores, up 20.66%


• Stock Returns: 1D -1.8%, 1W -6.53%, 1M -2.86%, 3M -7.62%, 6M -2.47%, YTD -4.32%, 1Y -0.69%

Conclusion

Adani Green Energy Ltd’s current Strong Sell rating reflects a comprehensive assessment of its financial health, valuation, and market performance as of 09 January 2026. The company’s high debt burden, flat financial trends, and expensive valuation relative to its returns present significant risks for investors. While the power sector remains critical to India’s energy transition, this particular stock currently exhibits characteristics that warrant caution. Investors should carefully weigh these factors against their risk tolerance and investment horizon before considering exposure to Adani Green Energy Ltd.

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