Adani Power shares snap 5-day rally, slip over 1% amid profit-taking

Shares of Adani Power slipped as much as 1.2% on Wednesday to Rs 589 on the BSE, snapping a five-day rally that saw the stock surge nearly 12% since June 3. The decline appears to reflect profit-booking after a sharp upward move driven by a combination of technical strength and long-term growth triggers.

The stock had rallied to an intraday high of Rs 610 on Tuesday, gaining 8.2% during the session and marking its fifth consecutive day of gains.

Despite a mixed March-quarter performance—with net profit falling 4% year-on-year to Rs 2,637 crore and a sequential decline of 14%—investor sentiment remained upbeat, supported by long-term order wins and capacity expansion plans.

Revenue for the quarter rose 6.5% YoY to Rs 14,237 crore, though it fell 4% compared to the December quarter. Total expenses during the period surged 9% YoY to Rs 11,274 crore.

Order Wins and Capacity Expansion in Focus

The recent rally was partially driven by Adani Power’s announcement in May of a Rs 2 billion greenfield thermal power project. The company secured a Letter of Award to supply 1,500 MW of electricity to Uttar Pradesh Power Corporation Ltd under a long-term power purchase agreement.

The power will be generated from a 2×800 MW ultra-supercritical plant, developed under the DBFOO (Design, Build, Finance, Own, and Operate) model.

Brokerage InCred Equities, which initiated coverage in May with an ‘Add’ rating and a price target of Rs 649, described Adani Power as a “pure play on the Indian thermal space.” It noted that the company generated Rs 200 billion in recurring EBITDA in FY25, backed by a stable revenue mix.

InCred also highlighted the company’s merchant power exposure via the Indian Energy Exchange (IEX), with realised prices ranging from Rs 5–6/kWh and peaking at Rs 10/kWh.

Looking ahead, Adani Power plans to expand capacity from 17.55 GW to 30.67 GW by FY30, including brownfield additions such as Mahan Phase II (1.66 GW), Raipur Phase II (1.66 GW), and Korba Revival (1.32 GW). InCred noted that this expansion aligns with India’s projected 5–6% annual power demand growth, which is expected to drive peak demand to 458 GW by FY32F.

Technical Indicators Support the Uptrend

Despite muted earnings, technical indicators remained supportive. The stock has been trading above all eight key simple moving averages—from the 5-day to the 200-day SMA. The Relative Strength Index (RSI) stood at 68.8, near the overbought threshold of 70, while the MACD reading of 6.9 stayed above both its center and signal lines, reinforcing bullish momentum until the latest dip.

Valuation Concerns After Recent Spike

While the stock has gained 15.4% over the past month and 8.5% in the past week, it remains down 23% over the past year, underperforming both the Nifty 50 and Nifty Energy indices.

According to Trendlyne, analyst sentiment remains strong, with a consensus “Strong Buy” rating on the stock.

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