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Stream/Area:
-
Subject:
-
Paper ID:
10.55041/IJSREM.GSTCOS065
Volume:
10 |
7 |
Jul 2026
Pages:
1--
Publication Frequency:
Monthly (12 issues per year)
License:International Journal of Scientific Research in Engineering and Management follows the Creative Commons Attribution 4.0 (CC BY 4.0) License, allowing free use and distribution with proper attribution.
Student of MBA
CMR Institute of Technology, Hyderabad, Telangana, India.
Assistant Professor of MBA
CMR Institute of Technology, Hyderabad, Telangana, India.
The increasing emphasis on sustainable energy and the global shift towards clean technologies have intensified the need for rigorous financial analysis within the renewable energy sector. As key players in India’s green energy transition, Tata Power Solar and Adani Green Energy Limited hold significant strategic and commercial relevance. This study aims to evaluate and compare the financial health and potential distress risks of these two leading solar power companies using the Altman Z-Score model—a widely recognized quantitative framework developed by Edward Altman in 1968 for predicting corporate bankruptcy. The model integrates five critical financial ratios that collectively assess a firm's profitability, leverage, liquidity, solvency, and operational efficiency, providing a comprehensive metric of overall financial stability. This research adopts a case study methodology, utilizing secondary data sourced from official financial statements, industry reports, and other credible publications over a four-year period (2021–2024). The Altman Z-Score formula, adapted for publicly traded companies, is applied consistently across all years for both firms. The calculated Z-scores are then interpreted based on Altman's original classification criteria: the distress zone (Z < 1.81), grey zone (1.81 < Z < 2.99), and safe zone (Z > 2.99). Through this empirical analysis, Tata Power Solar is observed to show significant improvement over the study period, evolving from a distress zone score in 2021 (Z = 1.71) to approaching financial stability by 2024 (Z = 2.88). Adani Green Energy Limited, in contrast, consistently demonstrates healthier financial ratios, often nearing or breaching the threshold of the safe zone, indicating lower risk of insolvency throughout the examined timeframe.
KEYWORDS
The overall analysis of the charts indicates that the company experienced mixed financial performance during the period from 2021 to 2025. The X variables (X1, X2, X3, X4, and X5) generally showed a positive and upward trend, reflecting improvement in operational efficiency, profitability, liquidity, and overall financial stability over time. Among these, X5 recorded the strongest growth, indicating better sales generation and asset utilization, while X4 also demonstrated significant improvement in financial strength. However, the Z-score attributes (Z1, Z2, Z3, Z4, and Z5) revealed fluctuations and instability in the company’s financial condition. Most of the Z variables declined sharply during 2023 and 2024, with some values even turning negative, suggesting financial stress, reduced profitability, or operational challenges during those years. Despite this downturn, the company showed signs of recovery in 2025, as several attributes improved and returned to positive values. Overall, the analysis suggests that although the company faced financial difficulties in the middle years, it gradually recovered by 2025, indicating improving financial management and the potential for better stability and growth in the future.
· Edward I. Altman (1968). Financial ratios, discriminant analysis and the prediction of corporate bankruptcy. The Journal of Finance, 23(4), 589–609. · Edward I. Altman (2000). Predicting Financial Distress of Companies: Revisiting the Z-Score and ZETA Models. New York University, Stern School of Business. · Tata Power Annual Reports. (Used for financial statements and ratio calculations.) · Adani Green Energy Annual Reports. (Used for financial statements and ratio calculations.) · Financial Management. I. M. Pandey (2023). Financial Management (latest edition). Vikas Publishing House.
Publication Date
7/4/2026
Peer Review Type
Double-Blind Peer Review
Review Rounds: 2
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Conflict of Interest
The authors declare no conflict of interest related to this research work.
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