The rally in shares of Adani Power has run out of steam in the last six months. The multibagger stock traded flat at Rs 325.80 today against Rs 327.85 on May 23 this year. However, the large cap stock zoomed 226.82% this year and rallied 226% in the last one year. This implies that the Adani Group stock surged a huge 228% in nearly first five months of this year rising to Rs 327.85 on May 23 against the close of Rs 99.70 on December 31, 2021.
Similarly, a majority of peers of Adani Power have delivered negative returns during the last six months. While shares of Adani Green fell 10.55%, Power Grid Corporation stock has lost 4.14% during the period. Tata Power and JSW Energy too have declined 3.83% and 2.11%, respectively during the last six months.
On the other hand, shares of Adani Transmission and NTPC have gained 31% and 11.42%, respectively since May 23 this year. In the current trading session, shares of Adani Power fell 0.75 per cent to Rs 326 on BSE. The stock has been losing for the last nine days. Adani Power shares stand higher than 200 day moving averages but lower than 5 day, 20 day, 50 day and 100 day moving averages.
Market cap of the firm fell to Rs 1.25 lakh crore on BSE. Total 0.79 lakh shares of the firm changed hands amounting to a turnover of Rs 2.58 crore. The stock hit a record high and a 52-week high of Rs 432.80 on August 22, 2022 and a 52-week low of Rs 93.60 on November 29, 2021.
Currently, Adani Power stock is trading 24.67 per cent lower compared to its all-time high. However, the Adani Group firm has reported a strong set of earnings in the last two quarters on a year-on-year basis.
Adani Power reported a consolidated net profit of Rs 696 crore for the September quarter 2022-23, backed by higher one-time income. The Adani Group firm incurred a net loss of Rs 231 crore in the corresponding quarter of the previous fiscal. Total income climbed 52 per cent to Rs 8,446 crore against Rs 5,572 crore in the September quarter 2021-22.
An increase in revenue was aided by improved tariffs under long-term power purchase agreements (PPAs) on account of higher prices of imported coal as well as improved merchant/short-term tariffs due to more demand.However, profit fell 85.45% from Rs 4,779.86 crore in the June quarter. Revenue too slipped 48.67% from Rs 13,723 crore in the June quarter.
In June quarter of the current fiscal, Adani Power reported an over 17 times rise in its consolidated net profit at Rs 4,780 crore against Rs 278 crore profit in the corresponding quarter last year. Total revenue in Q1 more than doubled to Rs 13,723 crore compared with Rs 6,568.86 crore in the corresponding previous quarter.
Here's a look at what analysts said about prospects for the Adani Power stock after the dull phase in the last six months.
Abhijeet from Tips2trade believes that targets of Rs 378-400 for Adani Power in the near term are possible.
"After having a phenomenal 2022 where Adani Power stock price has almost zoomed by more than 200%, the stock is taking a much needed breather after Q2FY23 results. Rs 315-330 remains a strong support zone on the daily charts and investors should wait for these levels to start accumulating for targets of Rs 378-400 in the near term," said Abhijeet.
Tirthankar Das, Technical & Derivative Analyst, Retail, Ashika Stock Broking sees buying opportunity at levels of Rs 290-300.
"In comparison with other mid-cap counters, the stock seems resilient though prices have corrected closer to 23.6% retracement of the entire rally since March 2020 (currently at Rs 335). Hence, short-term trend might change to positive if it is able to sustain above it, else further downside towards the next support level of Rs 275 (38.2% retracement) is possible. On the oscillator front too, no signs of bottoming out can be seen yet. Hence, it is advisable to accumulate at lower levels of Rs 290-300," said Das.
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