Will Reliance Power Cross ₹100 in 2025? by Trade Brains | Dec 7, 2024 | News, Stocks

 

Reliance Power, a prominent player in India’s energy sector, is on a promising recovery trajectory. After overcoming significant challenges, including debt resolution and subsidiary disputes, the company is now focusing on growth. With plans to expand its energy portfolio and explore innovative projects, it aligns with government efforts to boost thermal power capacity. Investors are keenly watching whether these strategic moves could propel its stock price to ₹100 in the near future.

Share Price Movement 

The share price of  Reliance Power Limited went up by 4.89 percent to Rs. 45.25 per share on Friday, an increase from its previous close of Rs. 43.14 per share. The market capitalisation now stands at approximately Rs. 17,755 crores as of December 06, 2024. The stock has generated 14.5 percent returns in a weekJoin Jagpreet Sir's Intraday Masterclass to Master Market Strategies and Boost your Profits. Sign up now for success!

Recent Updates 

SECI withdraws the debarment notice of 3 years against Reliance Power Limited and Reliance NU BESS (New Energy Battery Energy Storage Systems), effective immediately. This will allow the company to rights for future tenders. SECI retains its legal rights, and the earlier public notice is modified to reflect this update.

Q2 Financial Highlights

According to its recent filing, in the quarter ending September 2024, Reliance Power’s consolidated revenue from operations has decreased by 13.6 percent YOY from Rs. 2,038 crore in Q2 FY24 to Rs. 1,760 crore in Q2 FY25 and deceased by 11.6 percent QoQ from Rs. 1,992 crore in Q4 FY24. 

The company’s consolidated net profit has turned from a negative Rs. 238 crore in Q2 FY24 to a positive Rs. 2,878 crore in Q2 FY25.

Financial Ratio Analysis 

The company’s performance shows further cause for concern. Over the past year, the stock price CAGR was concerning with a negative 4%, indicating a decline in shareholder value. Looking at the Trailing Twelve Months (TTM) period, the compounded sales growth was a modest 2%, while the compounded profit growth was a worrying -23%. These short-term metrics suggest the company is struggling to drive sustainable growth and profitability, which could potentially impact its long-term viability if the trends continue.

Company Outlook 

Reliance Power, under Anil Ambani’s leadership, is making a strong comeback after overcoming significant challenges. The company has recently resolved its debt issues. including settling disputes related to its subsidiary, Vidarbha Industries Power Limited. This marks a key turning point for the company, allowing it to focus on future growth.

Reliance Power is expanding its portfolio with new projects, including energy storage systems, and is positioned to benefit from the government’s focus on increasing thermal power capacity. With a diversified energy and coal portfolio and a commitment to long-term investments, Reliance Power is well on its way to a successful turnaround.

Market Outlook 

India has a growing demand for electricity, driven by its large population and increasing electrification and per-capita usage. The government is taking steps to boost the power sector, including allocating higher funds to green energy initiatives and identifying thermal units to replace with renewable energy by 2026.

Policy support, such as 100% FDI allowed in the power sector, and schemes like Deen Dayal Upadhyay Gram Jyoti Yojana are expected to augment electrification across the country. With increased investments worth Rs. 17 lakh crore expected in the next 5-7 years, the Indian power sector appears poised for significant growth and development.

Shareholding Pattern

As of the December 2024 shareholding pattern,  Reliance Power Limited is primarily held by the promoters at 23.27 percent, foreign institutional investors hold 13.12 percent, and the public with 60.72 percent.

About Company

Reliance Power Limited, a prominent name in India’s energy sector, operates under the Reliance Group, one of the nation’s largest conglomerates. Established on January 17, In 1995, the company initially operated as Bawana Power Private Limited before adopting its current name in July 2007. With a robust presence in the power industry, Reliance Power is dedicated to delivering reliable energy solutions across India and beyond.  

The company specialises in developing, constructing, and operating power projects. Its diverse portfolio includes a total generation capacity of 5,945 MW, spanning thermal and renewable energy sources. Key projects like the Sasan Ultra Mega Power Project, with a capacity of 3,960 MW, underline its commitment to providing cost-effective electricity to millions.

Other major ventures include the Rosa Power Project in Uttar Pradesh and the Butibori Thermal Power Plant near Nagpur, Maharashtra. Reliance Power also emphasises sustainable energy through multiple hydroelectric and renewable initiatives.  

With strategic project locations and a focus on efficiency, Reliance Power addresses India’s growing energy needs while advancing environmental goals. By expanding its capacity and leveraging innovative solutions, the company continues to play a pivotal role in shaping the nation’s energy landscape.

Written By Fazal Ul Vahab C H

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