Adani Power stock zooms 90% in a month; what's fuelling the rally?

Adani Power on Monday became the sixth Adani Group firm to hit a market capitalisation of Rs 1 lakh crore. The rise in the market cap came after the stock hit upper circuit of 5 per cent today. The large cap stock has gained 5 per cent to Rs 272.15 today against the previous close of Rs 259.20 on BSE. Market cap of the firm stood at Rs 1.04 lakh crore. Total 51.92 lakh shares of the firm changed hand amounting to a turnover of Rs 141.06 crore in the afternoon session.

The stock has gained 210 per cent in a year and zoomed 173 percent in 2022. Adani Power stock is trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The stock has rallied 90 percent in a month.  In the last four sessions, the stock has rallied 17 percent.

Total 52.77 lakh shares of the firm changed hands amounting to a turnover of Rs 142.98 crore on BSE today. The share hit a fresh 52-week high of Rs 272.15 today and a 52-week low of Rs 69.95 on August 24, 2021.

One key reason behind the rise in stock is the rise in demand for power which has forced power producers such as Adani Power to manufacture with full capacity.

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On Friday, Adani Power entered the list of top 50 most valued firms in terms of market capitalisation. Market cap of the firm reached Rs 99,972 crore in the last session. The stock hit a high of Rs 259.20 on Friday.

Last week, Emkay Global said Bank of Baroda, Tata Elxsi, NMDC, Adani Power, and AU Small Finance Bank were likely to included in the MSCI (Morgan Stanley Capital International) India Standard Index. After the inclusion, these five stocks could see a combined inflow of Rs $485 million, according to estimates by Emkay.

On March 23, Adani Power said its board has approved an amalgamation scheme for the merger of its six wholly owned subsidiaries with itself. Adani Power stock touched an intraday high of Rs 134.35, rising 8.57 percent against the previous close of Rs 123.75 on BSE.

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Since then, the stock has been in an uptrend for the majority of sessions.

Adani Power reported Rs 218.49 crore consolidated net profit for December quarter 2021-22 against a loss of Rs 288.74 crore in the year-ago period. Total income stood at Rs 5,593.58 crore in against Rs 7,099.20 crore in the corresponding period a year ago.

Adani Power is a thermal power producer in India with a power generation capacity of approximately 12,450 megawatts (MW) comprising 12,410 MW of thermal power plants and a 40 MW solar power project. It focuses on providing power generation and coal trading. Its subsidiaries include Adani Power (Mundra) Limited, Adani Power Maharashtra Limited, Adani Power Rajasthan Limited, Udupi Power Corporation Limited, and Raipur Energen Limited.