Adani Power shares in bull run for five days, still down 35% from 52-week high; what should investors do?

Shares of Adani Power Ltd surged the most in the Adani Group pack after the BSE and NSE revised the circuit limit for the electricity firm to 20 per cent from 5 per cent earlier. Adani Power stock rose 7.11% to Rs 281.7 against the previous close of Rs 263 on BSE. A total of 21.24 lakh shares of the firm changed hands amounting to a turnover of Rs 58.31 crore on BSE. Market cap of the firm rose to Rs 1.05 lakh crore on BSE.  The stock has been rising for the last five sessions.  

At 12:52 pm, the stock was trading 3.95% higher at Rs 273.40 on BSE.  

The share hit a 52 week high of Rs 432.80 on August 22, 2022 and a 52 week low of Rs 132.55 on February 28, 2023.  

In terms of technicals, the relative strength index (RSI) of Adani Power stands at 68.4, signaling it's trading neither in the overbought zone nor in the oversold zone. The stock has a beta of 1.2, indicating very high volatility in a year. Shares of Adani Power are trading higher than the 5 day, 20 day, 50 day and 100 day moving averages but lower than 200 day moving averages.  

Despite today’s rally, the stock is still trading 35 per cent lower to its yearly high. However , it has gained 112% from the 52 week low.  

 Abhijeet from Tips2trades said, "Adani Power stock price is currently overbought on the daily charts with a strong resistance at Rs 279. A daily close below the support of Rs 263 could lead to targets of  Rs 243-214 in the near term." 

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V.L.A. Ambala from Stock Market Today said, "Adani Power is trading in Rs 270 to Rs 275 range and it in bullish zone. Expected targets in the future are Rs 300/3250/400/450/500. One should maintain a strict stop loss at Rs 200 for these targets. Indicators like MACD are showing bullishness and RSI value is 73 (indicating a bit high buy as of now) at daily TF and 59 and weekly time frame. Price is grading above 200 Days EMA in daily & weekly time frame. So, its alright to hold it more for more gains as mentions above. Fresh Buying zone should be Rs 240 to Rs 275 with given target and stop loss."

The Adani Group firm reported a 13% rise in Q4 profit. Adani Power’s consolidated net profit after tax (PAT) rose 12.9 per cent to Rs 5,242.48 crore as compared to Rs 4,645 crore for Q4 FY22. 

Consolidated total revenue for Q4 FY23 came at Rs 10,795 crore as compared to Rs 13,308 crore in Q4 FY 2021-22. 

The company said its revenue for Q4 FY 2022-23 includes de-recognition of revenue from operations pertaining to prior periods amounting to Rs (-) 194 crore and recognition of other income pertaining to prior periods amounting to Rs 325 crore. 

Consolidated total revenue for FY23 climbed 35.8 per cent to Rs 43,041 crore in FY23 as compared to Rs 31,686 crore in FY22. The company said the improved revenue and profit are on the back of improved tariff realisation, high import coal price, and higher one-time revenue recognition. 

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