RPOWER - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.5

📊 Fundamental & Valuation Analysis

Reliance Power Ltd (RPOWER) is showing signs of a turnaround after years of financial distress. While still speculative, the company has improved its profitability, reduced debt, and attracted renewed investor interest.

🔍 Key Metrics Breakdown

Metric Value Interpretation

Market Cap ₹23,252 Cr Mid-cap, high volatility

Current Price ₹56.2 Near short-term support

Book Value ₹40.7 P/B ~1.38 → Reasonable

ROE -1.08% Negative, but improving trend

1

ROCE 6.15% Below ideal, but recovering

Dividend Yield 0.00% No passive income

Debt-to-Equity 0.93 High, but reduced from previous years

1

EPS ₹7.69 Positive turnaround

2

1

PAT Qtr ₹44.7 Cr Down from ₹126 Cr, but still profitable

PEG Ratio Not available Growth visibility unclear

Industry PE 41.2 Sector is richly valued

📉 Technical & Trend Analysis

RSI (36.6): Oversold zone, potential bounce

MACD (-1.55): Bearish momentum

DMA 50 & 200: Price above 200 DMA, long-term trend intact

Volume: Strong, above weekly average

Price Trend: Up ~57% YoY, but volatile

✅ Long-Term Investment Outlook

RPOWER is a speculative long-term candidate with improving fundamentals

Debt reduction and asset monetization

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Positive net profit and EPS turnaround

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Interest in renewable energy projects (e.g., Bhutan solar JV)

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Institutional interest slowly returning

However, ROE and ROCE remain weak, and the stock is highly sensitive to sentiment and regulatory news.

🎯 Ideal Entry Price Zone

Based on technical support and valuation

Buy Zone: ₹48–₹53

Near historical support and rounding bottom breakout zone

4

Offers margin of safety for long-term accumulation

🧭 Exit Strategy (If You Already Hold)

If you're holding RPOWER

🔄 Short-Term Traders

Exit near ₹65–₹70, which is a resistance zone

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Use trailing stop-loss below ₹52

🕰️ Long-Term Investors

Hold only if debt continues to fall and ROE turns positive

Reassess if price breaks below ₹48 or debt-to-equity rises above 1.2

Consider partial profit booking above ₹75–₹80

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⚠️ Analysts recommend exiting if price falls below ₹34 on a closing basis

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⏳ Suggested Holding Period

Speculative Hold: 6–12 months

Long-Term Hold: 2–3 years if turnaround sustains

Would you like a comparison with other power sector stocks like Tata Power or JSW Energy to evaluate safer alternatives?

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