Reliance Power’s stock has been on a tear lately, jumping 29% in March. This surge comes after a rough start to the year, with the stock dropping 17% in February and 6% in January. As of Friday, March 28, the stock held steady at ₹42.98 on the NSE.
Reliance Power Share Price Jumps 29% in March – Should You Invest Now?
The recent uptick has caught the attention of many investors. Over the past year, Reliance Power’s stock has climbed 52%, outpacing the Nifty 50’s 5% gain. The stock hit a 52-week high of ₹53.64 on October 3 and a low of ₹23.30 on June 5 last year.
What’s Driving the Surge?
Analysts point to several factors behind this rally. Nitin Kotiyal, a senior research analyst at Fynocrat Technologies, highlights that the company’s thermal power plants are among the top performers in India. Additionally, Reliance Power is making moves into clean energy, securing a significant solar and battery storage project—one of the largest in Asia. The company also plans to invest in green energy projects in Andhra Pradesh, bolstering its renewable energy portfolio.
Financial Health Check
On the financial front, the sale of Reliance Capital to IndusInd International Holdings has improved the company’s debt-to-equity ratio from 1.61 to 0.86. However, it’s worth noting that despite claims of being debt-free, Reliance Power still holds ₹250 crore in non-convertible debentures (NCDs) as per the recent Q3FY25 financials. The company’s plans to issue foreign currency convertible bonds (FCCBs) could further increase its debt load. On the bright side, improvements in the debt service coverage ratio and interest coverage ratio suggest a better capacity to meet debt and interest obligations.
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Reliance Power Share, Should You Buy or Wait?
While the company’s strategic shifts and financial metrics show promise, analysts urge caution. Kotiyal advises investors to wait for clearer signs of a turnaround before jumping in, noting that other stocks in the same sector might offer better opportunities as the market gears up for the next rally.
Pros and Cons of Reliance Power Share
Pros:
- Strong Performance: Top-performing thermal plants and a significant push into renewable energy.
- Financial Improvement: Better debt-to-equity ratio and coverage ratios.
Cons:
- Residual Debt: Existing NCDs and potential increase in debt due to planned FCCBs.
- Market Uncertainty: Potential resistance levels and the need for clearer recovery signs.
Latest Market Trends of Reliance Power Share
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- Reliance Power Share Price Surges 11% in a Weak Market. Do You Own? Analyzing the 11% surge amid overall weak market conditions.
Conclusion
Reliance Power’s recent 29% surge in March reflects a notable rebound, driven by strategic initiatives and improved financial metrics. However, potential investors should weigh the existing debt and market uncertainties before making a decision. It’s advisable to monitor the company’s progress and market conditions closely, considering both the opportunities and risks involved.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not NSENEW. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary
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