Adani Total Gas shares crack 80% in 2023 so far, test Rs 700 level today; can they fall further?

Shares of Adani Total Gas Ltd were locked in the lower price band for the third straight session on Wednesday, testing Rs 700 level. The stock today fell 5 per cent to hit a low of Rs 701.70. It has slumped 80.23 per cent in 2023 so far. At today's lower circuit of Rs 701.70, the scrip traded 7.13 per cent higher from its 52-week low of Rs 655, a level seen on March 1 this year. That said, the counter has lost 82.45 per cent of its value from its one-year high of Rs 3,998.35, hit on January 23, 2023. The stock continued to fall despite exiting the ASM (additional surveillance measure) framework a few sessions back.

Adani Total resumed fall earlier this month after Ahme­dabad-based chartered accountancy (CA) firm Shah Dhandharia & Co resigned as statutory auditor of the company. Shah Dhandharia was named in Hindenburg Research's report. The audit firm has been replaced by Walter Chandiok & Co.

Adani Group shares saw a massive market value erosion since January 24 this year, when US-based short seller Hindenburg released a report alleging stock manipulation and accounting fraud by the energy-to-ports conglomerate. The US-based short seller had also raised the issue of the size and capability of the CA firms (including Shah Dhandharia) auditing the Adani Group. Adani and Shah Dhandharia, however, denied all the allegations.

The Supreme Court is hearing a bunch of petitions seeking a probe into Hindenburg's report against the Gautam Adani-led group. The top court would hear Sebi's plea seeking an extension of the time to submit its report.

On the technical setup, Adani Total's stock looked 'bearish', analysts said.

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AR Ramachandran from Tips2trades said, "The stock looks bearish but also oversold on the daily charts with strong support now around the Rs 680 level. Investors should buy only if a daily close is above the resistance of Rs 860 for higher targets of Rs 940-1,040 in the near term."

Ravi Singh, Vice-President and Head of Research at Share India, said, "The stock looked weak. It can correct more and can touch Rs 650."

VLA Ambala, Research Analyst at Stock Market Today, said, "The counter gave a bearish indication recently. The share price may tank more towards Rs 640-600 levels in the coming days. For Fresh buying, one should wait a little more. Rs 500 to Rs 600 could be a strong demand zone in this stock and after that targets between Rs 800 and 1,400 could be possible. Stop loss should be placed at Rs 400."

Adani Total was last seen trading lower than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 25.99. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 153.32. It has a price-to-book (P/B) value of 27.65.

Yet, the stock has an average target price of Rs 3,475, Trendlyne data showed, suggesting a potential upside of 395.23 per cent. The scrip has a one-year beta of 1.56, indicating high volatility.

The company is a joint venture of Adani Group and France's TotalEnergies which retails CNG to automobiles and piped gas to households.

Meanwhile, Indian equity benchmarks fell sharply in late-morning deals, dragged by technology, financials, metals, consumer durables and banking stocks.

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