Adani Green Stock Gains 2% on Withdrawal from Sri Lanka Wind Power Project
Adani Green Stock : Shares of Adani Green Energy Ltd (AGEL) rose 2% on Tuesday, crossing ₹935 on the NSE, following reports that the company has decided to withdraw from its proposed wind power project in Sri Lanka. The move is seen as a strategic decision, potentially ending uncertainty over the project’s financial viability and its impact on the company’s future prospects.
Why Did Adani Green Exit the Sri Lanka Project?
Adani Green had planned to develop a 484 MW wind power project in Mannar and Poonerin, Sri Lanka, with a total investment of $442 million. The agreement, signed in early 2023, allowed the company to supply power at 8.26 cents per kWh for 20 years. However, Sri Lanka’s new government sought to renegotiate the tariff last month, pushing for a rate lower than 6 cents per unit, which made the project financially less attractive.
Bloomberg, citing a letter from Adani Green, reported that the company has officially withdrawn from the project after these tariff revisions were proposed. This marks a significant shift, especially considering that in January 2025, Adani Green dismissed earlier reports of the project being revoked, calling them “false and misleading.”
Market Reaction: Investors Cheer the Decision
Following the news, Adani Green’s stock gained 2%, reflecting investor optimism. The project withdrawal eliminates uncertainties surrounding its execution and potential revenue impact, which had been an overhang on the stock.
Stock Performance at a Glance
- Current Price: ₹935
- Market Cap: ₹1,48,083 Cr
- 52-Week High / Low: ₹2,174 / ₹870
- Stock P/E: 102
- Debt: ₹67,430 Cr
- Debt-to-Equity Ratio: 6.38
Why Was the Project Considered Controversial?
Sri Lanka’s energy policy shift played a key role in this development. Aruna Kulatunga, President of the EOI Project Developers Association, noted that Adani Green’s tariff was higher than local bidders, making it less competitive. This fueled speculation about the project’s feasibility under the new administration’s energy pricing strategy.
Moreover, the Adani Group has faced increased scrutiny over the debt burden of its various entities. The decision to step back from a potentially lower-margin project aligns with Adani Green’s strategy to maintain financial discipline and focus on more profitable ventures.
Adani Green’s Financial Snapshot
| Metric | Value |
|---|---|
| Market Cap | ₹1,48,083 Cr |
| Current Price | ₹935 |
| High / Low | ₹2,174 / ₹870 |
| Stock P/E | 102 |
| Book Value | ₹66.8 |
| Dividend Yield | 0.00% |
| ROCE | 9.65% |
| ROE | 14.7% |
| Debt-to-Equity | 6.38 |
| Debt | ₹67,430 Cr |
| PEG Ratio | 2.82 |
| Intrinsic Value | ₹148 |
| Piotroski Score | 7.00 |
| Price to Book Value | 14.0 |
| ROIC | 7.39% |
What’s Next for Adani Green?
Adani Green remains a key player in India’s renewable energy sector, with ambitious expansion plans in wind and solar energy. The company is expected to prioritize high-margin projects in its domestic market and focus on improving financial metrics, especially given the stock’s 52% decline in the last six months.
Analysts believe that Adani Green’s withdrawal from the Sri Lanka project could be a positive in the long run, allowing the company to channel resources into more profitable, less risky ventures. Investors will now be keenly watching the company’s upcoming projects and its ability to manage its debt levels while sustaining growth.
Final Thoughts
Adani Green’s stock recovery following the project withdrawal signals investor confidence in its strategic direction. While the Sri Lanka exit might seem like a setback, it could actually strengthen the company’s long-term financial health. Going forward, Adani Green’s ability to execute high-quality renewable energy projects while maintaining a strong balance sheet will be key to its stock performance.
With increasing demand for clean energy solutions, the company’s future remains promising, provided it continues to focus on sustainable and profitable growth.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.