Reliance Power shares extend gains, jump 11% today; here's what analysts say

Shares of Reliance Power Ltd rose sharply on Wednesday, extending their gains for the fourth straight session. The stock surged 10.51 per cent to settle at Rs 20.19. At this price, the scrip has gained 123.09 per cent from its one-year low price of Rs 9.05, a level seen on March 28 this year when it turned into a penny stock. Yet, it was down 19.08 per cent from its 52-week high of Rs 24.95, hit on September 6, 2022.

On BSE, around 8.90 crore shares changed hands today. The figure was way more than the two-week average volume of 1.95 crore shares. Turnover on the counter came at Rs 173.91 crore, commanding a market capitalisation (m-cap) of Rs 7,541.38 crore.

The company's net loss widened to Rs 296.31 crore in the June quarter (Q1 FY24) due to lower income and higher expenses. Reliance Power had a recorded net loss of Rs 160.79 crore in the same period last year.

Total income decreased to Rs 1,958.72 crore in Q1 FY24 from Rs 2,144.97 crore in the year-ago period. Expenses rose to Rs 2,182.69 crore from Rs 2,145.90 crore in the same period last year.

On technical setup, analysts largely suggested booking profits at current levels.

"The stock has already given more than 40 per cent returns in the last six months. At the current juncture, traders should book profit and re-enter the stock at a lower level," said Ganesh Dongre, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

"Reliance Power is bullish but also overbought on the daily charts with next resistance at Rs 20.95. Investors should be booking profits at current levels as a daily close below support of could lead to Rs 19.15 could lead to target of Rs 14.3 in the near term," said AR Ramachandran from Tips2trades.

The counter was last seen trading higher than the 5-day, 10-, 20-, 30-, 50-, 100- and 150-, 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 74.38. 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 9.66 against a price-to-book (P/B) value of 0.77.

Reliance Power has a one-year beta of 1.09, indicating high volatility on the counter.

Meanwhile, Indian equity benchmarks settled on a flat note today as losses in bank, financial and energy stocks countered gains in technology, consumer and automobile shares.

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