Adani Green Energy Upgraded to 'Hold' by MarketsMOJO, Positive Financial Results Show Potential for Growth

Adani Green Energy, a largecap company in the power industry, has recently been upgraded to a 'Hold' by MarketsMOJO on January 23, 2024. This upgrade comes after the company has declared positive results for the last three consecutive quarters. Its operating cash flow has been the highest at Rs 7,265.00 crore, while its net sales have grown at an impressive rate of 36.04% to reach Rs 4,382.00 crore. Additionally, its return on capital employed (ROCE) has also been the highest at 9.88%.
Technically, the stock is currently in a bullish range and has shown improvement from being mildly bullish on January 16, 2024. Multiple factors such as MACD, Bollinger Band, and KST indicate a bullish trend for the stock.

With a market cap of Rs 2,48,701 crore, Adani Green Energy is the second largest company in the power sector, behind NTPC, and constitutes 15.89% of the entire sector. Its annual sales of Rs 8,953.00 crore make up 1.88% of the industry.

However, the company's high debt-to-equity ratio of 6.65 times indicates a weak long-term fundamental strength. Its ROCE of 8.6 also suggests a very expensive valuation with a 5.3 enterprise value to capital employed. Despite this, the stock is currently trading at a discount compared to its average historical valuations.

In the past year, while the stock has generated a negative return of -12.92%, its profits have increased by 161.3%. This gives the company a PEG ratio of 1.2, indicating a potential for future growth.

Interestingly, despite its size, domestic mutual funds hold only 0.33% of the company. This could signify that they are not comfortable with the current price or the business, as they have the capability to conduct in-depth research on companies.

In the last year, Adani Green Energy has underperformed the market (BSE 500) with a negative return of -12.92%, while the market has generated a positive return of 23.79%. This could be a cause for concern for investors. Overall, with its recent upgrade to 'Hold' and positive financial results, Adani Green Energy shows potential for growth in the future.