Adani Stock Analysis: Fundamentals and Technical Insights
The Problem: Many investors are overwhelmed by Adani Group’s rapid price swings and mixed news flow. The Promise: This in-depth report will demystify Adani’s fundamentals and technical charts, helping you make informed decisions on Adani shares.
Table of Contents
- Company Overview
- Fundamental Analysis
- Technical Analysis
- Adani vs. Peers Comparison
- Key Features & Metrics
- Frequently Asked Questions (FAQs)
- Further Reading & Internal Links
- Conclusion & CTA
1. Company Overview
Adani Power Ltd. (NSE: ADANIPOWER) is a leading private power producer in India, part of the diversified Adani Group. The company operates thermal power plants across the country, with a total installed capacity of over 12 GW. Adani Power’s stock has been in the limelight due to aggressive capacity expansion, debt-fueled acquisitions, and market volatility.
2. Fundamental Analysis
Fundamental analysis helps you gauge whether Adani stock is fairly valued. Here are the key metrics:
2.1 Financial Health
- Revenue Growth: 15% CAGR over the last 3 years
- Net Profit Margin: ~8%, improving year-on-year
- Debt-to-Equity Ratio: 1.8x (industry average: 1.2x)
- Return on Equity (ROE): 12% (benchmark: 15%)
2.2 Valuation Metrics
- Price-to-Earnings (P/E) Ratio: 16x vs. sector average of 18x
- Price-to-Book (P/B) Ratio: 2.1x vs. peers at 2.5x
- EV/EBITDA: 7.5x (attractive vs. 9x for mid-cap power stocks)
2.3 Growth Drivers
- Capacity Expansion: New greenfield and brownfield projects under development.
- Long-term Power Purchase Agreements (PPAs): Ensures revenue visibility.
- Renewable Energy Push: Diversification into solar and wind projects.
3. Technical Analysis
Technical analysis on the NSE chart reveals current momentum and support/resistance levels.
3.1 Moving Averages
- 50-day EMA: ₹580 (resistance)
- 20-day SMA: ₹572 (support turned resistance)
3.2 Key Chart Patterns
- Head & Shoulders: Emerging bearish pattern on the 60-minute chart.
- Double Bottom: Possible near ₹568 if sideways drift continues.
3.3 Oscillators & Indicators
- RSI (14): 42 (neutral to slightly oversold)
- MACD: Bearish crossover below signal line
3.4 Support & Resistance Levels
- Immediate Support: ₹570
- Major Support: ₹565
- Immediate Resistance: ₹574
- Major Resistance: ₹580
4. Adani vs. Peers Comparison
How does Adani Power stack up against NTPC and Tata Power?
| Metric | Adani Power | NTPC | Tata Power |
|---|---|---|---|
| P/E Ratio | 16x | 14x | 18x |
| Debt/Equity | 1.8x | 0.9x | 0.7x |
| ROE | 12% | 15% | 10% |
| 5-year Revenue CAGR | 15% | 10% | 12% |
5. Key Features & Metrics
- Market Capitalization: ₹1.25 lakh crore
- 52-Week Range: ₹450 – ₹620
- Average Daily Volume: 1.2 million shares
- Analyst Consensus: Moderate Buy
6. Frequently Asked Questions (FAQs)
Q1: Is Adani Power a good long-term investment?
A: With strong growth drivers and PPAs, Adani Power can be a core holding, provided you’re comfortable with higher leverage.
Q2: What are the risks associated with Adani shares?
A: Key risks include high debt levels, regulatory scrutiny, and commodity price volatility.
Q3: At what price should I buy Adani Power stock?
A: Look for pullbacks toward ₹570–₹565 support zone or wait for a breakout above ₹580 with volume confirmation.
Q4: How does Adani Power compare with other Adani Group companies?
A: Adani Power has higher debt than ports and airports verticals but offers faster earnings growth potential.
7. Further Reading & Internal Links
For more on market trends and strategies, check out:
8. Conclusion & CTA
Adani Power’s stock offers a compelling mix of growth and risk. By combining fundamental metrics with chart patterns, you can time your entries and exits more effectively. Always use proper risk management and stay updated on company announcements.
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