Adani Green, Adani Energy shares rallied up to 49% in 3 days; is more steam left?

Shares of Adani Green Energy Ltd (AGEL) and Adani Energy Solutions Ltd (formerly known as Adani Transmission Ltd) continued their stellar upmove for the third consecutive session in Friday's trade. AGEL's stock surged 23 per cent to hit its upper price band of Rs 1,338.45. At this price, it has ascended by 48.81 per cent in just 3 trading days.

Adani Energy also climbed on a similar note as the counter too extended its gains for the third day. The scrip jumped 19.53 per cent to hit a high of Rs 869.40. Considering this value, it has gained 44.62 per cent in three sessions.

Adani stocks continued to gain momentum as big investors reposed faith in the group after the clarification on the alleged US bribery case. The Indian conglomerate claimed that there were no bribery charges against Gautam Adani and other group executives. It also said that its portfolio companies have sufficient liquidity to cover all debt servicing requirements for at least the next 12 months.

"The confidence in the business fundamentals of Adani Group companies has not been shaken despite US allegations. There are no doubts about the group's ability to deliver infrastructure projects. Today, the group has more than Rs 85,000 crore of EBITDA and 20 per cent kind of CAGR growth for 3 years. This is against a debt of around Rs 2,40,000 crore, which is around three years of EBITDA if at all the growth is not counted. I think nobody will even doubt including the banker about financial ability of the group to manage its businesses," Deven Choksey, MD of DR Choksey FinServ Private, told Business Today.

On the stock-specific front, Bourses BSE and NSE have put the securities of AGEL and Adani Energy under the short-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

Technically, support for AGEL's stock could be seen in the Rs 1,150-1,000 range. "Rs 1,300-1,400 is likely to be seen as an intermediate hurdle and a decisive surpass could only trigger fresh buying traction in the counter. On the lower end, Rs 1,100 is likely to cushion any upcoming blips, followed by Rs 1,000 mark," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

"Adani Green can hit an upside target of Rs 1,440. Keep stop loss placed at Rs 1,150 for this trade," said Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking.

"Strong support on the counter could be seen at Rs 1,000. That said, it can hit an upside target of Rs 1,400 in the near term," said Sebi-registered research analyst AR Ramachandran.

For Adani Energy shares, near-term support may be found in the Rs 700-750 zone. "The counter seems strong with support at the Rs 720-700 zone, while resistance is placed around Rs 880-900-odd levels in the comparable period. Though a cautious stance is warranted amidst the ongoing news flow in the counter," Krishan suggested.

"Adani Energy can climb up to Rs 900 level in the near term. Keep a stop loss at Rs 750," Singh said.

"Support for Adani Energy will now be at Rs 724. On the higher end, it can hit an upside target of Rs 871 in the near term," said Ramachandran.

US authorities last week accused Adani, his nephew and executive director Sagar Adani and managing director of AGEL, Vneet S Jaain, of being part of a scheme to pay bribes to secure Indian power supply contracts and misleading US investors.

The Adani Group has denied the accusations in the US indictment as baseless and said it will seek all legal recourse.

The fresh charges follow much turmoil for the Adani Group in January last year when US-based short seller Hindenburg Research accused it of using offshore tax havens improperly - a charge that the Indian conglomerate has denied.