The trajectory of Adani Power Ltd shares has been nothing short of remarkable, surging by an astounding 155% from their 52-week low reached at the close of February this year. February 28, 2023, saw Adani Power shares touch a 52-week low at Rs 132.55. Fast forward to the present day, and the stock is trading at Rs 338.10 in afternoon trade on the BSE, marking a staggering 155.07% gain over this relatively short period.
These remarkable returns underline the substantial multibagger potential of Adani Group’s stock, which has already rewarded investors with exceptional gains of 201% and 838% over the past two and three years, respectively. On September 12, 2023, Adani Power shares achieved a significant milestone by reaching a 52-week high of Rs 410, though they have subsequently seen a slight decline of 17% from this annual peak. This sets the stage for a compelling discussion on the current investment landscape for Adani Power Ltd.
Adani Power’s Market Cap Soars to Rs 1.30 Lakh Crore Amid 155% Surge
As the market cap of Adani Power surges to a formidable Rs 1.30 lakh crore and the stock witnesses a noteworthy 155% ascent from its 52-week low, the critical question arises: is it the right moment to consider investing in this scrip? With 7.35 lakh shares changing hands, resulting in a substantial turnover of Rs 24.88 crore on the BSE, the Adani Group’s stock reveals both vigor and investor interest. Notably, the stock’s beta of 1.5 suggests heightened volatility within the past year, adding an extra layer of complexity to the decision-making process. In this context, let’s delve into the insights offered by analysts and experts, shedding light on the stock’s outlook and the opportune timing for potential investments.
Analyst Insights on Adani Power: Buy Signals, Short Consolidation, and a Sell Call
Experts and analysts weigh in on the outlook of Adani Power, offering diverse perspectives on the stock’s trajectory. Abhijeet from Tips2trades emphasizes the technical aspect, identifying a robust resistance level at Rs 390 on the Daily charts. He suggests that investors should consider buying the stock only if a dip close to the support of Rs 309 materializes.
Vaishali Parekh, AVP at Prabhudas Lilladher, notes Adani Power’s commendable rally, encountering resistance near the Rs 409 mark before undergoing a slight retracement. She identifies a near-term support level at Rs 360, and while acknowledging the stock’s overall robust trend, she anticipates further upward movements following a short consolidation phase.
On the flip side, Mileen Vasudeo, Senior Technical Analyst at Arihant Capital Markets, provides a contrasting perspective, advocating a sell call on the stock. She establishes a target price range of Rs 300-280 and suggests setting a stop loss at Rs 360. These varied insights present a comprehensive view of the complex decision-making landscape for potential investors in Adani Power.
Technical Analysis: Indications of Weakness in Adani Power’s Chart and RSI Insights
The technical analysis of Adani Power’s daily chart reveals a concerning pattern known as a “lower top, lower bottom” formation, indicating underlying weakness. Currently, the stock has an immediate support level at Rs 338, and should this level be breached, it may usher in intensified selling pressure. Additionally, the momentum indicator, MACD, shows a negative orientation. Mileen Vasudeo suggests considering a sell position at Rs 341 with a stop loss set at Rs 360, aiming for target levels between Rs 300 and Rs 280 within a span of a couple of weeks.
From a technical perspective, the Relative Strength Index (RSI) for Adani Power is at 36.5, indicating that the stock is currently neither in the overbought nor oversold territory, offering a neutral stance. Furthermore, Adani Power shares are currently trading below the 5-day, 20-day, 30-day, and 50-day moving averages but are surpassing the 100-day and 200-day moving averages, providing a comprehensive snapshot of the stock’s recent performance in relation to key moving averages.
Adani Power Records Significant 83.25% Surge in Net Profit, Driven by Robust Other Income
Adani Power made waves in the financial landscape by revealing an impressive 83.25% increase in consolidated net profit for the quarter concluded in June 2023, amounting to Rs 8,759.42 crore, a substantial leap from the Rs 4,779.86 crore recorded in the June quarter of the previous fiscal year. This noteworthy growth in profit is attributed to a substantial surge in other income.
However, the company witnessed a decline in revenue from operations, which dropped to Rs 11,005.54 crore, marking a 19.80% decrease compared to the Rs 13,723.06 crore reported during the corresponding quarter of the previous fiscal year.
Of particular note is the remarkable upswing in other income, which skyrocketed to Rs 7,103.47 crore. This figure incorporates a one-time recognition of prior period regulatory revenue, totaling Rs 6,497 crore. The substantial inflow is primarily attributed to the late payment surcharge, signifying a significant boost in Adani Power’s overall financial performance.
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