Adani Power shares soar 12% in 5-day rally. Is it time to book profits?

Shares of Adani Power extended their winning streak for a fifth consecutive session on Tuesday, climbing as much as 8.2% to hit an intra-day high of Rs 610 on the BSE. The stock has now rallied nearly 12% in five sessions since June 3, defying broader weakness in the market and underperformance over the past year.

The rally comes in the wake of muted Q4 earnings, where the company posted a 4% year-on-year decline in consolidated net profit to Rs 2,637 crore. On a sequential basis, profit fell 14% from Rs 3,057.21 crore in Q3FY25. Revenue in the March quarter, however, rose 6.5% YoY to Rs 14,237 crore, although it slipped 4% sequentially. Meanwhile, expenses surged 9% from a year ago to Rs 11,274 crore.

Despite the mixed results, technical indicators have turned positive. The stock is trading above all eight key simple moving averages, spanning from the 5-day to the 200-day SMA. Its Relative Strength Index (RSI) at 58 indicates neutral momentum, while the MACD reading of 3.6 remains above its center line, suggesting bullish undertones, though it’s still below the signal line.

A major catalyst driving the rally appears to be the Rs 2 billion greenfield thermal power project the company announced in May.

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Adani Power secured a Letter of Award to supply 1,500 MW of electricity to Uttar Pradesh under a long-term power purchase agreement with Uttar Pradesh Power Corporation Ltd. The power will be generated from a 2×800 MW ultra-supercritical plant, to be built under the design, build, finance, own, and operate (DBFOO) model.
InCred Equities, which initiated coverage on Adani Power in May with an ‘add’ rating and a target price of Rs 649, called the company a “pure play on the Indian thermal space.” The brokerage said Adani Power is a pure play in India’s thermal power space with 87% of its capacity tied to long-term power purchase agreements (PPAs) that include a fuel cost pass-through mechanism.
The brokerage said, “The company generated Rs 200 billion of recurring EBITDA in FY25, supported by this stable revenue mix,” while also leveraging merchant power through the Indian Energy Exchange (IEX), with realised prices ranging between Rs 5–6/kWh and a peak of Rs 10/kWh.
Looking ahead, Adani Power plans to expand its capacity from 17.55 GW to 30.67 GW by FY30, including brownfield additions like Mahan Phase II (1.66 GW), Raipur Phase II (1.66 GW), and Korba Revival (1.32 GW). InCred said the company’s growth plan is well-aligned with India’s projected 5–6% annual power demand growth, which could push peak demand to 458 GW by FY32F.

Even with the current rally, the stock is still down 21% over the past year, underperforming the Nifty, which declined 8.04%, and the Nifty Energy index, which fell 10.05% in the same period.

According to Trendlyne data, analysts remain optimistic, with a “strong buy” consensus on the stock.

Still, with the stock having risen 17% in the past month and 8% in the past week alone, investors may now be weighing whether to book profits or ride the wave.

Also read | Adani Power shares may rally 18%, positioned as a pure play in India’s thermal power space: InCred Equities

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