Adani Power shares rise 180% in one year; Should investors book profits or hold?

Adani Food Stock: Adani Power on Thursday announced a multiple increase in profit after tax (PAT) to Rs 4,645 crore from Rs 13 crore in the corresponding quarter of last year. Total consolidated revenue for the quarter climbed 93% year-on-year to Rs 13,308 crore from Rs 6,902 crore in the same quarter last year. The company said electricity demand continued to grow strongly in India, driven by both economic growth and a heat wave in the northwest of the country. Recent geopolitical events in Europe are said to have led to a sharp increase in global fuel prices, including coal, oil and natural gas.

“This in turn has affected the ability of several thermal power plants in India to produce electricity at viable costs, limiting their output. Due to supply constraints in the face of growing electricity demand, the average market equilibrium price of electricity on the exchanges rose to Rs. 8.23/kWh during the day. he.

Recently, shares of thermal power producer Adani Power have been on a roll. The stock delivered multibagger returns to its shareholders. Over the past year, the share price has risen from Rs 97 to Rs 279.50, recording a return of around 188% over this period.

The certificate generated a return of more than 500% in three years. Long-term investors have made big gains investing in this stock, as it has jumped around 1,000% over the past four years.

Adani Power – What Should Investors Do?

Anuj Jain, Director of Research and Co-founder of Green Portfolio, explained that “it’s not really what it looks like, quarter revenue includes 2,946 crore and other revenue includes 1,982 crore period revenue. previous accounted (based on the settlement act with the Discoms). But even if you remove that impact, Q4 performance was good (revenue up 42% and PBT up 490% QoQ). Additionally, they completed the acquisition of Essar Power MP Limited, which has a 1,200 MW operating unit in Mahan, MP. Adani Power, like other group companies, is growing very rapidly, both organically and inorganically. The UMPP in Mundra has been a big overhang on share price performance for years. It seems to be decreasing with 1234 MW PPP with Gujarat government now revived. The plant’s average load factor of 51.5% in FY22 is very low. But it also means that more good could be there in the future. Net Debt is at 2, which has improved in FY22. We did a simple calculation where we removed prior period revenue and other revenue at a time – from FY22 22 and FY21. Based on the work, the EPS for FY22 comes out at 1.51 and for FY21 it was -3.52.”

With an EPS of 1.51 and a CMP of 277, the valuation is not comfortable for us.

Therefore, we believe that those who have invested can hold these stocks for the long term, as the company can continue to grow from here. However, buying fresh produce is not suggested, Jain said.

Ravi Singh, Share India, said: “Adani Power has generated a substantial return thanks to the increase in electricity demand and the shortage of coal. Short-term investors may take profits at current levels or on the requirement of funds to meet their basic needs, otherwise Adani Power’s fundamentals suggest the stock could touch the 350 levels in the long term.”

“After power scarcity around the world and in India itself, we believe that all factors are taken into account, so investors should make a 50% profit and let SL CTC lag,” Ravi Singhal, Vice President, GCL Securities

Read all the latest IPL 2022 news, breaking news and live updates here.