Synopsis: Shares of Adani Power Ltd have experienced a significant surge, rising by nearly 27% in just two trading days. On Wednesday, the stock jumped 6% to reach a day high of Rs 571.50, drawing the attention of both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). As per market experts, the sudden rise in stock price has sparked speculation, with the company providing a clarification regarding the price movement.
Shares of Adani Power Ltd have continued their upward trajectory for the second consecutive session, with the stock price climbing by a substantial 6% to hit a day high of Rs 571.50.
Over the last two trading days, the stock has soared by 26.96%, raising questions regarding the reasons behind this sharp increase in share price.
The surge has prompted both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) to seek clarification from the company on the stock's sudden rise.
In response, Adani Power issued a statement clarifying that the movement in share prices is purely due to market conditions, emphasizing that the company's management has no control over the volume increase and is not aware of the specific factors behind it.
The stock witnessed a high trading volume, with over 27 lakh shares being traded on BSE, surpassing the two-week average volume of 8.73 lakh shares.
As of the latest trading data, the turnover reached Rs 150.91 crore, and the company commanded a market capitalization of Rs 2,12,633.04 crore.
From a technical standpoint, the stock is currently supported in the Rs 530-514 range, with immediate resistance expected around Rs 600.
Market analysts have provided various projections for the stock's near-term performance.
Raghvendra Singh, a market expert, suggested that investors may buy and hold Adani Power stock, anticipating that it could reach Rs 650.
Meanwhile, Ravi Singh, Senior Vice-President at Religare Broking, projected an upside target of Rs 600, recommending a stop loss at Rs 530.
Kushal Gandhi, a technical analyst at StoxBox, foresees a short-term opportunity with a target price of Rs 621, maintaining a stop loss at Rs 514.
The stock's recent performance indicates it is trading above several key simple moving averages (SMA), such as the 5-day, 10-day, 20-day, and 30-day SMAs, although it remains below the 100-day, 150-day, and 200-day SMAs.
The 14-day relative strength index (RSI) for the stock stands at 57.75, indicating neutral momentum, as values above 70 are considered overbought and those below 30 oversold.
Adani Power's price-to-earnings (P/E) ratio stands at 24.09, with a price-to-book (P/B) ratio of 5.21.
The company's earnings per share (EPS) are at 22.96, and it boasts a return on equity (RoE) of 21.63%. As of December 2024, promoters hold a 74.96% stake in the company, showcasing strong institutional backing.
Conclusion: Adani Power's stock has seen remarkable growth in a short period, raising questions about the reasons behind its surge.
Despite the heightened market activity, the company maintains that the price movement is purely market-driven. Technical indicators suggest potential growth in the stock, but caution is recommended for investors due to the volatility and ongoing trading volume fluctuations.
Investors should stay informed, and consider professional financial advice before making investment decisions.
Disclaimer: The information presented in this article is for informational purposes only and should not be construed as investment advice. It is highly recommended to consult with a qualified financial advisor or professional before making any investment decisions.
