Jaiprakash Power shares surge 29% in 3 days; is more steam left?

Shares of Jaiprakash Power Ventures Ltd (JP Power) extended their strong upmove for the third consecutive session in Thursday's trade. The stock jumped 16 per cent to hit a day's high of Rs 17.40. At this level, it has gained 28.98 per cent over the past three trading sessions.

This comes after the company said that the National Company Law Tribunal (NCLT), Allahabad Bench, has orally approved the resolution plan for its promoter firm Jaiprakash Associates Ltd (JAL), submitted by Adani Group’s flagship entity.

"We hereby inform you that the Hon'ble National Company Law Tribunal, Allahabad Bench, has orally pronounced an order approving the resolution plan submitted by M/s Adani Enterprises Ltd (the successful Resolution Applicant) with respect to the insolvency process of Jaiprakash Associates Ltd (the Promoter Company)," JP Power stated in an exchange filing.

Kranthi Bathini, Equity Strategist at WealthMills Securities, said the uptick in JP Power shares was largely driven by positive sentiment following the approval of JAL's resolution plan.

Ravi Singh, Chief Research Officer at Mastertrust, stated that the stock could climb further towards Rs 17.50 level in the near term.

Osho Krishan, Senior Analyst – Technical & Derivative Research at Angel One, noted, "JP Power has gained sharply, backed by robust volumes after a long period of correction. Rs 18 is likely to be seen as an intermediate hurdle in the near period."

Technically, the counter is trading above the 5-day, 10-day, 20-day, 30-day, 50-day and 100-day simple moving averages (SMAs) but below the 150-day and 200-day SMAs. Its 14-day relative strength index (RSI) came at 69.75. A level below 30 is defined as oversold, while a value above 70 is considered overbought.

The scrip has a standalone/consolidated price-to-earnings (P/E) ratio of 18.25/18.37 against a price-to-book (P/B) value of 0.95. Earnings per share (EPS) stood at 0.91/0.90 with a return on equity (RoE) of 5.17. According to Trendlyne data, JP Power has a one-year beta of 1.15, indicating high volatility.