Reliance Power Ltd shares extended their gains for the sixth straight session in Friday's trade. The stock jumped 5 per cent to hit its new 52-week high value of Rs 38.07. At this price, it has gained 27.88 per cent in six trading days. As today's session progressed, the counter gave up its entire gains and was last seen trading 0.66 per cent down at Rs 36.02.
The scrip has been on a rising spree after it was reported that Adani Power had begun talks to acquire a thermal power project in Nagpur once owned by Anil-Ambani's bankrupt Reliance Power. RPower, however, clarified that it won't comment on media speculations.
"We would like to clarify that we are unable to comment on media speculations and it would be inappropriate on our part to do so. The company continuously assesses different opportunities to settle its liabilities and is unable to provide any comment on movement in price in the stock markets," it stated in a BSE filing.
Analysts largely remained positive on RPower's counter for the near term. Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, said, "The stock has been buzzing after a recent news report claimed that Adani Power was in talks to buy Reliance Power's 600 MW thermal plant in Nagpur. It is one of the momentum stocks right now."
Market participants with a high-risk appetite can hold on to the stock but fresh buying is not advised at current levels, Bathini mentioned.
On the technical front, near-term support on the counter could be seen at Rs 35, followed by Rs 32 and Rs 30 levels. With that being said, an analyst suggested that RPower's stock has potential to hit an upside target of Rs 45 in the near term.
Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, said, "The stock looked strong on daily charts and can hit an upside target of Rs 42. Keep a stop loss placed at Rs 35 for this trade."
Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "Currently, the counter is placed at a crucial juncture of a multi-week breakout and a sustainable follow-up buying emergence is likely to trigger the next round of rally in the counter for the Rs 42-45 zone in the comparable period. On the lower end, a series of support zones are placed near the Rs 32-30 sub-zone."
The counter traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came at 66.73. A level below 30 is defined as oversold while a value above 70 is considered overbought.
As per BSE, the company's stock has a price-to-equity (P/E) ratio of 213.70 against a price-to-book (P/B) value of 1.55. Earnings per share (EPS) stood at 0.17 with a return on equity (RoE) of 0.73.
The company said its consolidated net loss narrowed to Rs 97.85 crore during the June 2024 quarter (Q1 FY25), on account of improved income. It had reported a loss of Rs 296.31 crore in the April-June period of the preceding 2023-24 financial year. It increased its total income to Rs 2,069.18 crore from Rs 1,951.23 crore in the year-ago period.
As of June 2024, promoters held a 23.24 per cent stake in the firm.