2400% gain in five years: Reliance Power share price delivers multibagger returns. Should you buy?

RPower share price: Shares of Reliance Power jumped 4% to a fresh 52-week high on Thursday, June 4, extending its rise as the Anil Ambani group firm had risen 5.45% in the previous trade.

Reliance Power share price today opened at ₹60.30 apiece on the BSE. The stock touched an intraday high of ₹63.39 per share and an intraday low of ₹59.93 apiece. The last one-year peak recorded by the stock was ₹62.80, on June 2.

R Power share price has experienced significant growth, rising more than 2,400% over the last five years. It has surged nearly 79% in just three months and approximately 51% in the past month.

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What’s driving the rally in recent times?

Recently, Reliance Power announced that its subsidiary, Reliance NU Energies, has been awarded a letter for a 350 MW solar power project, which includes a 175 MW/700 MWh Battery Energy Storage System from SJVN. When operational, this project will enhance Reliance Power’s portfolio by adding 600 MW of solar DC capacity and 700 MWh of BESS capacity, thereby reaffirming its position as a leader in new energy solutions, according to a company statement.

In addition, Reliance Power has established a commercial term sheet for a long-term power purchase agreement with Green Digital Pvt Ltd, which is owned by Druk Holding and Investments Ltd, the investment branch of the Royal Government of Bhutan.

Reliance Power and Druk Holding and Investments Ltd (DHI) plan to jointly construct Bhutan’s largest solar power project through a partnership with an equal share, targeting an installed capacity of 500 MW, as indicated by a company statement.

The project will require an investment of up to ₹2,000 crores under a Build-Own-Operate (BOO) model, making it the largest private sector foreign direct investment (FDI) in Bhutan’s solar energy field so far.

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Q4 Results

In the January-March quarter of FY25, Reliance Power swung to the black as it reported a consolidated net profit of ₹126 crore, attributed to reduced expenses. The company had experienced a loss of ₹397.56 crore during the quarter that ended on March 31, 2024, according to a regulatory filing.

Total revenue fell to ₹2,066 crore in the most recent fourth quarter, down from ₹2,193.85 crore in the same quarter last year.

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What should investors do?

According to Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, R Power share price has seen a massive run from the May month swing low and is at its highest point in the last five years. This recent upmove has been backed by strong volumes, Bhosale said.

“In the near term, prices may extend the upmove. However, considering the overbought conditions, dips would be ideal to enter longs, ₹56 – 57 seems strong support, whereas ₹72 as resistance,” he added.

Further, Riyank Arora, Technical Analyst, Mehta Equities, explained that Reliance Power share price is showing signs of profit booking after a recent rally, with major resistance placed at ₹65.

“R Power share price has run up significantly, and the current pause suggests short-term consolidation or mild correction. If it fails to break above ₹65, we may see selling pressure pushing the stock back toward ₹58– ₹59 support levels. Momentum remains positive overall, but traders should be cautious near resistance. Fresh entry is only advised on a decisive breakout above ₹65 with strong volume confirmation,” Arora said.

According to Anshul Jain, Head of Research at Lakshmishree Investments, post a 161-day cup and handle breakout at ₹48, R Power share price rallied swiftly to ₹60 and is now consolidating, digesting the sharp momentum. 

“This healthy pause is expected to continue for another 1-2 weeks, allowing daily and weekly moving averages to catch up. Once the consolidation completes, the stock is well-positioned to resume its uptrend, with the next target placed at ₹79. The structure remains strong, indicating continued bullish Momentum post consolidation,” Jain said.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.