Reliance Power, RInfra shares zoomed up to 58% in a month; here's what analysts have to say

Shares of Anil Dhirubhai Ambani Group (ADAG) controlled Reliance Power Ltd and Reliance Infrastructure Ltd have seen a sharp momentum rally in the past one month, rising 58.07 per cent and 56.52 per cent, respectively, as compared to a marginal 0.10 per cent climb in benchmark BSE Sensex during the same period.

Reliance NU Energies, a subsidiary of RPower, has recently received the letter of award (LOA) from state-run SJVN Ltd for a 350 MW inter-state transmission system (ISTS)-connected solar power project coupled with a 175 MW/700 MWh battery energy storage system (BESS).

RInfra's promoted Reliance Defence and Diehl Defence have taken forward their strategic partnership for Guided and Terminally Guided Munitions (TGM), as part of a cooperation agreement signed in 2019. In addition, RDefence and Düsseldorf-based Rheinmetall AG (a leading German arms manufacturer) have also entered into a strategic partnership in the field of ammunition. 

A few market experts largely stayed mixed on the counter following the recent sharp upward move.

"RInfra has bagged several strategic allotments, including arbitral awards, which are faring very well for it. There's growing chatter and feedback suggesting that the management is finally making meaningful progress. RPower too could be poised for a significant turnaround. We may see some positive developments for both RInfra and RPower," said Sharad Avasthi, Head of Research (PCG) at SMIFS, in an interview with Business Today.

"These companies have gone through a tough time and passing out a negative comment outrightly would be very easy. However, I believe the younger leadership currently in charge is doing commendable work. That said, we prefer to wait for more data and concrete confirmations before taking a firm stance. For now, I maintain a neutral view rather than giving a buy or sell recommendation," Avasthi added.

Rudra Murthy BV, MD at Vachana Investments, advised against placing bets in RInfra and RPower shares for now. "I understand there could be short-term moves but I will not personally advocate putting any money into these two stocks unless you are a quick trader. If you want to still put your money, you can place 5-10 per cent of your portfolio," Murthy stated.

Kunal Kamble, Senior Technical Research Analyst at Bonanza, said the recent increase in volume further supports the bullish sentiment in RInfra shares, reflecting buyers' confidence in the stock. "The broader structure remains positive and as long as the stock holds above Rs 301, any dip should be viewed as a buying opportunity," he added.

For RPower, Kamble said, "While the broader trend remains positive, the risk-reward ratio at current levels is not favourable. A dip towards the Rs 65–62 zone, with strong support at Rs 58, can be considered a buying opportunity. If the stock holds above these levels, it has the potential to move towards Rs 100–Rs 120 in the coming sessions."