Skip to main content


Showing posts from June, 2020

Is Adani power a good buy? | Fundamental Analysis

What does Adani Power do? Adani Power is a coal based electric power generation company that has approximately 10,000 megawatts generation capacity. Balance sheet analysisThe company's average current ratio for the last three years is 0.58, and the industry's current ratio is 1.96. Current ratio of the company has not been increasing in the previous ten years. It means the company is not capable of paying its debt by selling its assets in the short term, which is a bad sign for a company. Average ROE for the last three years is -1.53, which is even lower than the industry's average i.e., -0.05. It means that the management is not effectively using its assets for generating profits.Average debt-equity ratio over the previous three years is 27.8, which is much higher than the industry's average(1.86). Though the power sector is a capital intensive industry, 27 times debt to equity is a financial risk for the company. It means company won't be able to cover all outstan…