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Adani Green Energy has received a bullish outlook from JM Financial Institutional Securities, which initiated coverage on the company with a 'BUY' rating and a target price of Rs 1,289 per share. 

The positive view comes on the back of the company’s strong growth pipeline, steady cash flows, and its ambitious plan to scale renewable capacity to 50 GW by 2030.

A major part of this expansion will come from its massive 30 GW renewable energy park at Khavda in Gujarat, which is set to become the world’s largest RE park, according to the brokerage.

The brokerage believe this ambitious target is achievable because of Adani Green’s strong execution history, access to high-quality land banks spread across 2.5 lakh acres, and support from other Adani Group businesses involved in transmission, distribution and infrastructure.

The report highlights that the company has also adopted advanced technologies, including large 5.2 MW wind turbines, which help improve efficiency.

Around 81 per cent of its existing capacity is tied to long-term 25-year power purchase agreements, giving the company steady and predictable cash flows.

In the past three years, Adani Green has reported strong financial performance with revenue, EBITDA and profit after tax growing at a CAGR of 30 per cent, 36 per cent and 57 per cent, respectively.

Its EBITDA margin has strengthened to 79 per cent, and net debt levels have improved relative to earnings, moderating to 7.4 times in FY25.

Looking ahead, the brokerage estimate that between FY25 and FY28, the company will continue to deliver robust growth, with expected CAGR of 29 per cent in revenue, 32 per cent in EBITDA and 41 per cent in profit, along with an even stronger EBITDA margin of 83 per cent.

The stock has been valued at 14 times FY28 EBITDA, based on a run-rate of 28 GW capacity by that year.