Out of nowhere, Adani Green Energy is now the 17th or the 18th largest company in India by market value.
Bigger than most PSUs and up almost 10x in the last one year, the stock has really seen a meteoric rise.
Part of the sunrise industry of solar and wind energy, the company does have a few things going for it.
However, has the euphoria been overdone? Will the company continue to rise or is it all a big, speculative bubble that can burst any time?
I try to answer these questions in the video.
Do take a look.
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Rahul Shah co-head of research at Equitymaster is the editor of (Research Analyst), Editor, Microcap Millionaires, Exponential Profits, Double Income, Midcap Value Alert and Momentum Profits. Rahul has over 20 years of experience in financial markets as an analyst and editor. Rahul first joined Equitymaster as a Research Analyst, fresh out of university in 2003 but left shortly after to pursue his dream job with a Swiss investment bank. However, he quickly became disillusioned working for the 'financial establishment'. He learned first-hand the greedy stereotype of an investment banker is true and became uncomfortable working for a company that put profit above everything else. In 2006, Rahul re-joined Equitymas ter to serve honest, hardworking Indians like his father, who want to take control of their financial future - and not leave it in the hands of greedy money managers. Following the investment principles of Benjamin Graham (the bestselling author of The Intelligent Investor) and Warren Buffet (considered the world's greatest living investor), Rahul has recommended some of the biggest winners in Equitymaster's history.
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5 Responses to "Adani Green: A Future Multibagger or a Big, Speculative Bubble"
Diwakar Srivastava
Nov 27, 2020Very rational and realistic analysis. Absence of journalistic and emotional aspect makes your analysis superior.
Yatin Parikh
Nov 27, 2020Instead of comparing Adani Green with ONGC (which is not into solar powerand has been a wealth destroyer), it would have been prudent to compare with a similar company in same industry, namely Sterling and Wilson Solar, which is trading below its fair value.
amar galliara
Nov 27, 2020i definitely agree with this content, and i do believe that ONGC has still good numbers as compared to Adani Green. Even i too was wondering why is the share moving up so rapidly, because it just does not make sense. thanks for giving your professional feedback. it at least confirms my thinking.
Manohar Subramaniam
Nov 26, 2020Dear sir,
I do agree, but still it's a break or build like stock, like Amazon in the beginning did not have the value of today and questioned ... but those who invested are millionaires and some are billionaires, so technically and fundamentally you are right,but it's in a project with future and in hands of a well known citizen with other companies of Adani group, I feel we have to invest less and keep monitoring
Rahul
Nov 30, 2020Thanks for sharing your views in a clear and simple manner. I was not aware of the huge surge in Adani Green but your analysis was important to understand why it still does not make sense-as of now-to invest in that sunrise industry. Not completely convinced on your logic of buying ONGC as investors are likely to still shy away from putting too much of their money in a dying industry, so even if the intrinsic value is high and will remain higher for some years to come, it's unlikely to rise too much unless all companies in sunrise industry really fail dramatically and we just revert back to Oil and Gas- an unlikely scenario. Certainly worth a watch on how Adani Green is doing on its financials over the next few years and vs its own commitments!