Why Adani Green stocks are falling despite strong Q1 results? Reasons Explained

23 Jul 2026 , 01:08 PM

Adani Green Energy Ltd. (AGEL) shares fell as much as 5% on July 23, hitting a two-month low, after global brokerage Bernstein reiterated its ‘Underperform’ rating on the renewable energy major. At around 1:05 PM, the stock was trading 5% lower at ₹1,395.50, even as the company reported strong financial and operational performance for the first quarter of FY27.

The decline in the stock price reflects investor concerns over Bernstein’s view that a significant portion of Adani Green Energy’s future value creation has shifted to Adani Energy Solutions (AESL) following a strategic asset allocation.

Why Did Adani Green Energy Shares Fall?

According to Bernstein analysts, Adani Green Energy will allocate its entire merchant power portfolio, comprising 4 GW of operating and planned capacity, along with its entire battery energy storage capacity of 10 GWh, to Adani Energy Solutions on a long-term fixed tariff basis.

The brokerage believes this move allows Adani Green to remain focused on project execution while Adani Energy Solutions benefits by supplying power to industrial customers, including data centres. However, Bernstein noted that the transaction transfers a meaningful portion of Adani Green’s long-term upside to AESL.

While acknowledging AGEL as the best executor in India’s renewable energy sector and the only renewable energy company with a sustainable competitive moat, Bernstein maintained its cautious stance due to the changing earnings profile.

Bernstein Highlights EBITDA Impact

Bernstein also pointed to power curtailment as another near-term challenge for the company.

Power curtailment occurs when electricity generation is reduced because the grid cannot absorb the available renewable energy. According to the brokerage, curtailment reduced Adani Green Energy’s EBITDA by 5% to 7% during the quarter.

Management expects the impact to normalize during the second half (H2) of FY27, supported by improving grid conditions.

Adani Green Energy Q1 FY27 Results

Despite the brokerage’s cautious outlook, Adani Green Energy reported healthy financial growth during the June quarter.

The company posted a consolidated net profit of ₹983 crore, registering a 19.3% year-on-year increase from ₹824 crore reported in Q1 FY26.

Total income also increased to ₹4,663 crore, compared with ₹4,006 crore in the corresponding quarter last year.

According to Bernstein, the company delivered an estimated 31% year-on-year EBITDA growth, highlighting continued operational strength.

Strong Operational Performance

Adani Green Energy continued expanding its renewable energy portfolio during the quarter.

Key operational highlights include:

• Energy sales increased 30% year-on-year to 13,657 million units.
• Operational renewable capacity reached 20.1 GW, up 27% year-on-year.
• The company successfully crossed the significant 20 GW operational capacity milestone, reinforcing its leadership in India’s renewable energy sector.

Renewable Capacity Expansion

The company added 4,327 MW of greenfield renewable energy capacity over the past year, including:

• 3,051 MW of solar capacity
  • 2,662 MW at Khavda, Gujarat
  • 389 MW in Rajasthan
• 684 MW of wind capacity at Khavda.
• 592 MW of solar-wind hybrid capacity at Khavda.

During the June quarter alone, AGEL commissioned 848 MW of new renewable energy capacity.

Growth Outlook Remains Strong

Despite the market reaction, Adani Green Energy reaffirmed its long-term expansion plans.

The company remains on track to:

• Achieve 50 GW of renewable energy capacity.
• Add 5 GW of renewable capacity by FY27.
• Commission over 10,000 MWh of Battery Energy Storage System (BESS) capacity by FY27.

These projects are expected to strengthen AGEL’s position as India’s largest renewable energy developer.

Management Commentary

Commenting on the quarterly performance, CEO Ashish Khanna said the company has entered FY27 with strong execution momentum.

He highlighted that rising electricity demand in India is supporting renewable energy growth, while AGEL’s expanding portfolio continues to deliver reliable clean power and industry-leading operational performance.

Corporate Development

The company’s board also approved the appointment of Poly Singh Arora as Chief People Officer, who will also serve as a Senior Management Personnel.

Bernstein’s View on the Power Sector

Bernstein’s latest sector report presented mixed views across major power companies.

• Adani Green Energy: Underperform.
• Adani Power: Outperform, supported by a 13% increase in merchant tariffs and Plant Load Factor (PLF) improving to 78% from 67%.
• JSW Energy: Negative outlook.

Key Takeaways

• Adani Green Energy shares fell 5%, touching a two-month low.
• Bernstein retained its ‘Underperform’ rating despite strong quarterly results.
• Transfer of 4 GW merchant generation and 10 GWh battery storage to AESL is expected to reduce AGEL’s future upside.
• Q1 FY27 net profit increased 19.3% to ₹983 crore.
• Total income rose to ₹4,663 crore.
• Energy sales grew 30%, while operational capacity reached 20.1 GW.
• The company added 4,327 MW of renewable capacity over the past year.
• AGEL remains on track to achieve its ambitious 50 GW renewable energy capacity target.

 

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