Analyst Maheep Mandloi of Mizuho Securities maintained a Hold rating on ReNew Energy Global, reducing the price target to $7.00.
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Maheep Mandloi has given his Hold rating due to a combination of factors influencing ReNew Energy Global’s current market position. The withdrawal of Masdar from the consortium planning to take ReNew private has led to a significant drop in the stock price, which Mandloi considers an overreaction likely driven by risk arbitrage investors exiting. Despite this, the stock is trading at a discount compared to its book value multiples, indicating potential upside.
Mandloi also notes that the price target has been adjusted to $7, reflecting a no-growth EBITDA multiple for FY28, which is lower than the previous privatization offer. This adjustment accounts for market-wide multiple compression among peers. The Hold rating is maintained due to uncertainties surrounding potential catalysts for de-leveraging or buybacks, and the lack of clarity on Masdar’s withdrawal from the deal. Additionally, while the stock trades at a low multiple compared to peers, risks such as increased capital costs and execution challenges remain.