Reliance Power (RPower) shares are currently riding high, nearing their 52-week peak. But will this surge continue?
Why the Buzz?
RPower’s recent jump is fueled by exciting developments:
- Green Energy Push: Their subsidiary, Reliance NU Energies, just bagged a deal for a 350 MW solar project with a substantial battery storage system from SJVN Ltd. This boosts RPower’s clean energy portfolio to 2.4 GW of solar DC capacity and over 2.5 GWH of battery storage.
- Big Bhutan Partnership: They’ve also teamed up with Bhutan’s Druk Holding and Investments (DHI) for a massive ₹2,000 crore, 500 MW solar project – set to be India’s largest.
- Debt Reduction: RPower has been aggressively cutting down its debt, paying back ₹5,338 crore over the past year. This includes a recent $150 million (around ₹1,285 crore) repayment by Sasan Power Limited.
- Successful Fundraising: The company recently raised ₹1,525 crore through equity-linked warrants, further strengthening its finances.
What the Charts Say
RPower’s stock has been on a tear, jumping 5.45% recently and soaring over 146% in the last year, and an incredible 2,800% over the past five years. It’s trading above all its key moving averages, signaling strong upward momentum.
However, its 14-day Relative Strength Index (RSI) is at 73.07, indicating the stock is overbought. This often suggests a short-term correction or profit-booking could be on the horizon. The stock also has a high Price-to-Earnings (P/E) ratio of 378.69, implying a high valuation.
Expert Opinions: High Risk, High Reward
Market experts are split on RPower, labeling it a “high-risk, high-reward” stock.
- Bullish Views: Some analysts, like Jatin Gedia of ShareKhan, suggest existing investors keep riding the wave, eyeing potential gains to ₹68–72. Jigar S Patel of Anand Rathi sees immediate resistance at ₹65, with a break above it potentially pushing the stock to ₹68. Anshul Jain of Lakshmishree Investments even projects a target of ₹79 after consolidation.
- Bearish Warnings: Others, like independent research analyst AR Ramachandran, are more cautious. He notes the stock is “slightly bearish but overbought” and advises booking profits. A close below ₹58.1 could send the stock down to ₹45 in the near term.
It’s also worth noting that both BSE and NSE have placed RPower under the short-term ASM (Additional Surveillance Measure) framework, which signals high volatility and advises caution to investors.
The Verdict
Reliance Power’s shift towards renewable energy and its debt reduction efforts are certainly positive drivers. While some technical indicators and expert opinions point to continued upside, the stock’s overbought status and high valuation suggest that a period of consolidation or correction might be due. Given its volatile nature and the caution from exchanges, investors should proceed with extreme care.
What do you think – will RPower’s upward trajectory continue, or is a correction on the horizon?