Shares of power producers Adani Power and Tata Power are on investors’ radar amid expectations of a spike in demand for electricity during the ongoing summer season. Of late, Adani Power and Tata Power have delivered negative returns for investors due to very high market volatility and rising interest rates. Shares of Adani Power have lost 36.81% this year and fallen 19% in a year. On the other hand, Tata Power clocked losses of 23.54 per cent in one year. The power sector stock slipped 5.06 per cent this year.
Meanwhile, the BSE power index clocked gains of 5 per cent this year but lost 25.02 percent in the last one year. In three years, the BSE power index zoomed 143 per cent.
In terms of technicals, the relative strength index (RSI) of the Tata Power stock stands at 48.1, signaling the stock is neither oversold nor overbought. Tata Power has a one-year beta of 1.2, indicating very high volatility during the period. Tata Power shares are trading higher than the 5 day and 20 day moving averages but lower than 50 day, 100 day and 200 day moving averages.
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On the other hand, the relative strength index (RSI) of the Adani Power stock stands at 49.1, signaling the stock is neither oversold nor overbought. Adani Power has a one-year beta of 1.1, indicating high volatility during the period. Adani Power shares are trading higher than the 50 day moving averages but lower than 5 day, 20 day, 100 day and 200 day moving averages.
In today's session, shares of Tata Power and Adani Power were trading on a flat note amid a widespread weakness in broader market.
Tata Power stock rose 0.33 per cent to Rs 197.60 against the previous close of Rs 196.95 on BSE. Market cap of the firm stood at Rs 63,171 crore. Total 1.49 lakh shares of the firm changed hands amounting to a turnover of Rs 2.94 crore. The stock hit a 52-week high of Rs 269.30 on April 18, 2022 and a 52-week low of Rs 182.45 on March 28, 2023.
The share of Adani Power fell 0.40 per cent to Rs 188.60 on BSE. It stands higher than the 50 day moving averages but lower than 5 day, 20 day, 100 day and 200 day moving averages. Market cap of the firm fell to Rs 72,741 crore on BSE. Total 1.06 lakh shares of the firm changed hands amounting to a turnover of Rs 2.02 crore. The stock hit a 52-week high of Rs 432.80 on August 22, 2022 and a 52-week low of Rs 132.55 on February 28, 2023.
Here's a look at what analysts said about prospects of the two power sector stocks.
Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher is bullish on the Tata Power stock. “Tata Power stock has recovered strongly from the low made near Rs 182 level and currently is hovering near the trendline resistance zone of Rs 198 from where it needs a decisive breakout for further continuation of the positive move. A decisive move past the 50EMA level of Rs 202 shall further bring conviction for further rise in the coming days,” said Parekh.
On Adani Power, Parekh said, “Adani Power stock after the huge erosion since January 2023 has bottomed out near Rs 132 zone and recovered to some extent but the daily price action has narrowed down drastically making the chart technically look less significant. There is resistance witnessed near the 50EMA level of Rs 201 zone and would need a decisive move past the previous peak level of Rs 217 to indicate a breakout and establish some conviction for further upward move. In comparison, it would be advisable to go for Tata Power for investment purpose for consistent and stable returns.”
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Abhijeet from Tips2trades said, “After a phenomenal rally in 2020-21, where majority of the power sector stocks including Tata Power more than doubled in terms of stock price returns, 2022 has been comparatively subdued due to rising interest rate scenario leading to a much needed consolidation in terms of the stock price movement. A weekly close above Rs 194 should lead us back to Rs 210-215 in the near term. Rs 184 remains a strong weekly support. A weekly close below Rs 184 could lead to Rs 155 as well. "
On Adani Power , he said, "Adani Power has a strong resistance at Rs 198 on the Daily charts. Investors should buy only if close is above this level for targets of Rs 220-235 in the coming weeks. Support will be at Rs 185."
Osho Krishan, Sr. Analyst - Technical & Derivative Research, Angel One is bullish on the Tata Power stock. "Tata Power has seen a modest recovery in the last two trading weeks from the lows of the Rs 182-odd zone. The stock is hovering just below the critical resistance zone of Rs 200-205, breaching which in a decisive manner could only trigger the next leg of rally in the counter. On the contrary, the bullish gap around Rs 190 is likely to cushion any short-term blip, followed by a strong support of Rs 182 level, " said Krishnan.
Aamar Deo Singh, Head Advisory, Angel One said, "Adani Power stock continues to witness a free fall with the stock losing over 30% in February. Post the Hindenburg report, re-ratings and downgrades of many Adani group companies are a cause of concern for investors and with the latest news of Adani Power announcing lapse of its DB Power acquisition, brings no further solace either. Adani Power has corrected all the way from Rs 432 to currently trade around Rs 150, finding crucial support around Rs 120 levels, whereas technical resistance is seen around Rs 180. Hence, investors are advised to tread carefully till more clarity emerges."
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