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Rally in Adani Power shares stumbles toward year-end; time to buy, sell or hold?

Rally in Adani Power shares stumbles toward year-end; time to buy, sell or hold?

Adani Power shares closed at Rs 99.75 on December 31, 2021 against an intra day high of Rs 275.35 today, translating into 176% returns during the period

The Adani Power stock is trading 36.37% lower to the 52-week high of Rs 432.80 hit on August 22, 2022. The stock fell to a 52-week low of Rs 97.30 on December 27, 2021 The Adani Power stock is trading 36.37% lower to the 52-week high of Rs 432.80 hit on August 22, 2022. The stock fell to a 52-week low of Rs 97.30 on December 27, 2021

Adani Power shares have delivered stellar returns in 2022, with investor wealth nearly tripling during the period. Adani Power shares closed at Rs 99.75 on December 31, 2021 against an intra day high of Rs 275.35 today, translating into 176% returns. The stock hit an upper circuit of 5% at Rs 275.35  in the current session.

However, the Adani Power stock is trading 36.37% lower to the 52-week high of Rs 432.80 hit on August 22, 2022. The stock fell to a 52-week low of Rs 97.30 on December 27, 2021.

The trend is negative in the short term also. In one week, the stock has lost 10%. The stock is down 14.87% in a month. Adani Power shares have gained after three days of consecutive fall. In the current session too, the stock opened 5% lower at Rs 249.15 on BSE. However, it has recovered lost ground to hit the upper circuit amid a strong rally in the broader market.

Adani Power shares have gained after three days of consecutive fall. However, Adani Power stock is trading lower than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. Market cap of the Adani Group firm rose to Rs 1.06 lakh crore on BSE today.

A total of 5.70 lakh shares of the firm changed hands amounting to a turnover of Rs 15.05 crore on BSE.

The Adani Power stock has a Relative Strength Index (RSI) of 19.1, signaling that the scrip is strongly oversold. A value below 30 indicates that a stock is oversold and a value above 70 signals that the scrip is overbought.  Hence, the stock has oversold rating in terms of RSI. The firm's stock has a price to equity ratio of 9.76. This signals that the stock is neutrally valued compared to the industry PE of 10.46.

Also Read: Adani Group stocks rebound! Adani Power, Adani Wilmar rise 5% after recent slump

Shares of Adani Power have lost 23.53% since the Q2 earnings were announced on November 14 this year. The stock ended at Rs 360.1 on November 11.

The Adani Group firm reported a strong set of earnings in the last quarter 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.

After a stellar rally this year, Adani Power shares have corrected in the last few sessions, signaling profit-booking toward year-end. 

Here’s a look at what analysts said about the prospects of the Adani Group stock in 2023.

Abhijeet from Tips2trade said, "Adani Power stock price has corrected well since the past few sessions and now is approaching a strong support zone of Rs 290-305. Short-term traders can buy on daily charts for a target of Rs 326-340 in the near term. A daily close below Rs 290 could lead to an even better level of 260 to buy from a long-term perspective."."

Manoj Dalmia, Founder and Director, Proficient Equities, said, "Investors can avoid the stock currently as it is under selling pressure. Investors can consider buying it at lower levels at Rs 250."

Also Read: Adani Power shares hit lower circuit, again. Should you buy on dips?

Also Read: Reliance Industries Share: 500% Return In 10 Years! What's Next?

Published on: Dec 26, 2022, 2:17 PM IST
Posted by: Priya Raghuvanshi, Dec 26, 2022, 2:11 PM IST