{"id":49561,"date":"2024-12-23T14:36:51","date_gmt":"2024-12-23T09:06:51","guid":{"rendered":"https:\/\/www.equentis.com\/blog\/?p=49561"},"modified":"2024-12-24T11:44:51","modified_gmt":"2024-12-24T06:14:51","slug":"reliance-power-share-price-analysis-all-you-need-to-know","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/reliance-power-share-price-analysis-all-you-need-to-know\/","title":{"rendered":"Reliance Power Fundamental Analysis: All You Need to Know"},"content":{"rendered":"
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Want to understand the fundamental analysis<\/a> for Reliance Power? In 2008, Reliance Power made history by launching the largest IPO in the Indian market. The issue size was \u20b911,500 crores and was oversubscribed approximately 70 times.\u00a0<\/p>\n\n\n\n

Despite high optimism, the stock debuted at 17% discount. <\/p>\n\n\n\n

At the time, the company had no significant business operations and just recorded a mere \u20b92.2 crores revenue in FY07. The plan was to utilize the IPO proceeds for the construction and development of the new power projects and build the business. <\/p>\n\n\n\n

However, onset of global<\/a> financial crisis in 2008, regulatory hurdles, and market manipulation concerns resulted in the company’s share price to nosedive. <\/p>\n\n\n\n

Now, fast forward to 2024, the company is again making headlines. Reliance Power share price has given returns of up to 100% in the last one year. So, what\u2019s happening in Reliance Power share price?<\/p>\n\n\n\n

So, in this article, we will do a deep dive on the company\u2019s fundamentals and check out its future growth potential. Let\u2019s start. <\/p>\n\n\n\n

What Does Reliance Power Do?<\/h2>\n\n\n\n

Reliance Power is an energy generation company involved in the development, construction, and operation of power projects. The company has close to 6000 MW of operational power generation assets with diverse energy projects including coal-fired power plants and hydroelectricity projects located in Arunachal Pradesh and Himachal Pradesh. One of their significant projects is the 3,960 MW Sasan Ultra Mega Power Project in Madhya Pradesh<\/p>\n\n\n\n

Recently, the company diversified into solar and wind energy projects. Reliance Power has a portfolio of 45 MW of wind energy and 140 MW of solar energy projects.<\/p>\n\n\n\n

Reliance Power Management Team<\/h2>\n\n\n\n

Shri Anil Dhirubhai Ambani<\/strong> is the Chairman of Reliance Power and the Reliance ADA Group. <\/p>\n\n\n\n

Shri Ashok Kumar Pal<\/strong> is the Chief Financial Officer and was also appointed as the manager of the company. He is a qualified chartered accountant with more than 23 years of experience in handling accounts, finance, taxation, and other statutory compliance requirements. <\/p>\n\n\n\n

Smt. Ramandeep Kaur<\/strong> is the Company Secretary and Compliance Officer. She is also appointed as a key management personnel having more than 23 years of experience in secretarial matters with expertise in business strategy, business and corporate structuring, corporate actions. <\/p>\n\n\n\n

Reliance Power Shareholding Pattern<\/h2>\n\n\n\n
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In the domestic institution segment, LIC holds 2.56% stake in the company, and retail shareholders holding almost half of the company with 49.85% stake. <\/p>\n\n\n\n

Reliance Power Financial Performance<\/h2>\n\n\n\n

Revenue From Operations<\/h3>\n\n\n\n

The revenue growth has been flat in the last five years, as you can see in the table below. In FY24, the revenue from operations of the company rose 5% to \u20b97,893 crores from \u20b97,514 crores in FY23.<\/p>\n\n\n\n

And, in the first half of FY25, revenue from operations declined by 5% to \u20b93,752 crores from \u20b93,952 crores reported in the same period last year. <\/p>\n\n\n\n

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Net Loss<\/h3>\n\n\n\n

Reliance Power is consistently reporting losses in its operations and in FY24, the losses increased by over 5 times to \u20b92,068 crores from \u20b9403 crores in FY23. <\/p>\n\n\n\n

However, in the first half of FY25, the company reported a net profit of \u20b92,780 crores crores against a loss of \u20b9534 crores reported in the same period the previous year. The profit during the period is due to an one-time exceptional gains of \u20b93,230 crores on account of a deconsolidation of a subsidiary. <\/p>\n\n\n\n

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Key Financial Ratios<\/h3>\n\n\n\n

Current Ratio: <\/strong>The current ratio of the company in FY24 was steady at 0.3 times. It indicates that the company\u2019s current assets are insufficient to cover the short term liabilities. <\/p>\n\n\n\n

Debt-to-equity Ratio: <\/strong>The company\u2019s debt to equity ratio improved marginally to 1.6 times in FY24, compared to 1.8 times in FY23. <\/p>\n\n\n\n

The net debt of the company reduced from \u20b95,391.7 crores in FY23 to \u20b94,200 crores in FY24. <\/p>\n\n\n\n

Debt Service Coverage ratio<\/strong>: The company\u2019s debt service coverage ratio improved to 0.32 times in FY24 from 0.15 times in FY23. <\/p>\n\n\n\n

Operating Margin: <\/strong>Operationally, Reliance Power is making profits and in FY24, its operating profit margin was 15%. However, it declined from 25% in FY23. <\/p>\n\n\n\n

Reliance Power Share Price Analysis<\/h2>\n\n\n\n

In the last 5 years, Reliance Power share price has shed the tag of being a penny stock and rose by more than 1300%, from \u20b93.3 to \u20b946.60. Its 52-week high level is \u20b954.25. <\/p>\n\n\n\n

Reliance Power paid zero dividend to its shareholders since it is listed in the stock market<\/a>. <\/p>\n\n\n\n

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Source: TradingView<\/em><\/figcaption><\/figure>\n\n\n\n

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The rise in Reliance Power share price due to multiple factors that will aid in improving its operational efficiency. Some of the key factors include:<\/p>\n\n\n\n