Reliance Power Ltd’s shares have seen a remarkable upward trend, marking a fourth consecutive day of gains. On Wednesday, the stock soared 5% to reach a one-year high of ₹36.17, reflecting a 21.5% increase over just four trading days.
The recent rally in Reliance Power’s stock is attributed to reports that Adani Power is in discussions to acquire a thermal power project in Nagpur previously owned by Reliance Power. This news has significantly boosted investor interest.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, noted, “The counter has been buzzing after a recent news report claimed that Adani Power was in talks to buy Reliance Power’s 600 MW thermal plant in Nagpur. It is one of the momentum stocks right now.” He advised high-risk investors to hold onto the stock but cautioned against fresh purchases at current levels.
Technical analysis suggests that the near-term support level for Reliance Power is around ₹32, with resistance potentially emerging around ₹38. Osho Krishan, Senior Research Analyst at Angel One, highlighted that the stock is at a crucial juncture and a sustained buying momentum could push it towards the ₹42-45 range. However, he noted support zones near ₹32-30.
Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, also indicated a potential upside target of ₹38 for the stock. Jigar S Patel, Senior Manager of Technical Research at Anand Rathi Shares, echoed similar sentiments, suggesting that the stock could see the ₹38 level with a trading range between ₹30 and ₹40 in the short term.
Currently, the stock is trading above its 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day simple moving averages (SMAs). The 14-day relative strength index (RSI) is at 67.82, indicating that the stock is nearing overbought conditions.
According to BSE data, Reliance Power’s stock has a price-to-equity (P/E) ratio of 203.03 and a price-to-book (P/B) value of 1.47. The earnings per share (EPS) stands at 0.17, with a return on equity (RoE) of 0.73. Approximately 60.07 lakh shares were traded on BSE today, which is below the two-week average volume of 82.16 lakh shares. The turnover on the counter was ₹21.64 crore, and the market capitalization is ₹14,529.38 crore.
The company reported a consolidated net loss of ₹97.85 crore for Q1 FY25, an improvement from the ₹296.31 crore loss reported in the same quarter the previous year. Total income increased to ₹2,069.18 crore from ₹1,951.23 crore year-on-year.
As of June 2024, promoters hold a 23.24% stake in Reliance Power.