The Adani Group (ADANIGREEN: NSE) is reportedly planning to sell $409 million worth of bonds issued by its green energy subsidiary, Adani Green Energy Ltd., next week.
Adani Green: An Overview of Financial Performance
Adani Green’s track record of performance, positive cash flow, and superior returns give the investors mixed feelings. The stock’s performance dipped to -9.90% over the past week, but it showed a staggering rise of +230.25% over the past month, and +254.21% over the past year. This shows a substantial gain considering the 1-year capital and total return of 254.21%, ranked at 77.78% in sector percentile rankings.
Despite the impressive gains, the company’s high market capitalization, high debt equity ratio (665.83%) and volatility in total returns set alarm bells ringing. The company appears overpriced concerning its book value, earnings, cash flow, and free cash flow, thus warranting cautious observation for potential investors.
Analyst Stance on Adani Green:
Analysts on Stock Target Advisor opinions remain neutral towards Adani Green’s stock based on a balanced mix of 7 positive signals and 6 negative ones.
A beta coefficient of 1.11 suggests the stock’s total returns have been fairly volatile. The sector percentile ranking for the beta coefficient is at 25%. This could mean potential turbulence for investors if the economic conditions become rough.
Bottomline:
Adani Green’s decision to issue $409 million bonds next week represents a strategic move by the company to consolidate its renewable energy portfolio. However, investors must consider its overpricing when compared to book value and earnings, along with its high volatility in total returns.
