Adani Energy Sol (ADANIENSOL)

FairStock Score: 48/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Five-year revenue CAGR of 19.08% and latest quarter sales of ₹6,730 Cr show strong topline momentum.
• Profit growth of 294.39% with latest quarter net profit of ₹574 Cr indicates earnings acceleration.
• Piotroski F-Score of 7/9 suggests decent financial soundness on fundamentals.
• Promoter holding of 72.72% aligns controlling interest with minority shareholders.

Concerns

• At ₹1,361.60, the price is far above the Graham Number of ₹286.51, leaving a margin of safety of -253.06%.
• P/E of 54.11 and P/B of 7.41 are expensive relative to ROE of 10.18% and ROCE of 10.23%.
• Free cash flow is deeply negative at -₹6,527 Cr with debt/equity of 1.95, indicating heavy leverage and cash burn.
• EV/EBITDA of 389.09 and Altman Z-Score of 1.99 point to stretched valuation and financial stress risk; dividend yield is 0.00%.

AI Analysis

Let me examine Adani Energy Sol with the discipline Ben Graham taught me. The business has grown steadily: sales are up 20%, five-year revenue CAGR is 19.08%, and the latest quarter shows sales of ₹6,730 Cr and net profit of ₹574 Cr. Promoters hold 72.72%, so owner interests are aligned. But a value investor must separate a good business from a good price—and here the price is my problem. At ₹1,361.60, the stock trades at 54.11 times earnings and 7.41 times book, while the company earns only 10.18% on equity. The Graham Number is ₹286.51; I am being asked to pay more than four times that, producing a margin of safety of -253%. That is no margin of safety at all. Profit growth of 294.39% looks impressive, but with a P/E of 54.11, the market has already priced in perfection. The PEG of 0.92 is misleading when profit growth comes from a single-year surge; I seek multi-year earnings power. Financial health worries me more. Free cash flow is deeply negative at -₹6,527 Cr, debt-to-equity is 1.95, the Altman Z-Score is only 1.99, and EV/EBITDA stands at a staggering 389.09. A business with this debt load and cash burn needs patient capital, not an expensive equity. There is zero dividend yield; investors receive no cash return while expansion is funded by borrowing or dilution. This is a wonderful growth story, but not a wonderful investment at this price. Even an excellent infrastructure franchise must be bought with a margin of safety. Here, the room for error is absent.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer