Reliance Power Ltd Falls 11.19%: 5 Key Factors Behind the Sharp Weekly Decline

19 January: Heavy Trading Amid Continued Downtrend

Reliance Power began the week under pressure, closing at Rs.31.13, down 2.38% from the previous close. The stock was among the most actively traded on the day, with a volume exceeding 8.45 million shares and a traded value of approximately ₹26.82 crores. Despite the high liquidity and investor interest, the price remained close to its 52-week low of Rs.31.27, reflecting persistent bearish sentiment. The stock traded below all key moving averages, signalling a sustained downtrend. The delivery volume surge suggested a mix of accumulation and distribution, but the net effect was a continuation of the downward momentum.

20 January: Fresh 52-Week Low and Elevated Volume

The downtrend intensified on 20 January as Reliance Power hit a new 52-week low of Rs.30.55, closing the day at Rs.29.91, down 3.92%. The stock recorded an exceptional traded volume of over 30.6 million shares, with a traded value near ₹94.33 crores, highlighting heightened market participation. Despite this, the price decline outpaced both the power sector and the Sensex, underscoring company-specific challenges. Financial metrics revealed a high Debt to EBITDA ratio of 9.83 times and a modest Return on Equity of 0.49%, contributing to cautious investor sentiment. However, recent quarterly results showed a remarkable 95.43% net profit growth, indicating some operational improvements amid the broader weakness.

21 January: New 52-Week Low Amid Mixed Technical Signals

On 21 January, Reliance Power’s share price declined further to Rs.29.38, marking another 52-week low and extending the losing streak to five consecutive sessions. Despite a modest intraday gain of 0.74%, the stock closed below all key moving averages, indicating ongoing bearish momentum. Trading volume surged to 12.6 million shares, with delivery volumes rising by over 30%, suggesting renewed investor interest but also a complex battle between accumulation and distribution. Institutional investors reduced their holdings by 0.52% to 16.32%, reflecting cautious positioning. The company’s Mojo Score remained at 34.0 with a Sell rating, an improvement from a prior Strong Sell but still signalling risk.

22 January: Slight Recovery on Moderate Volume

Reliance Power saw a brief respite on 22 January, with the stock gaining 1.11% to close at Rs.29.97. This modest recovery came on lower volume of approximately 4.77 million shares, indicating limited conviction behind the bounce. The broader market, represented by the Sensex, rose 0.76%, contrasting with the stock’s continued trading below all moving averages. The short-term price uptick may reflect technical buying near support levels, but the overall trend remained negative.

23 January: Heavy Volume and Further Decline to 52-Week Low

The week concluded with Reliance Power falling sharply by 5.51% to Rs.28.32, hitting yet another 52-week low. The stock recorded a substantial volume surge of 19.5 million shares, with a traded value of ₹57.37 crores. Despite the heavy trading, delivery volumes declined by over 35%, suggesting increased speculative trading and reduced long-term holding. The price action was firmly bearish, with the stock trading below all key moving averages and underperforming both the power sector and the Sensex. The weighted average price indicated that most volume was transacted near the day’s low, reinforcing selling pressure. The company’s financial leverage and subdued profitability metrics continue to weigh on investor sentiment.

Daily Price Performance: Reliance Power vs Sensex

Key Takeaways

1. Significant Underperformance: Reliance Power’s 11.19% weekly decline far exceeded the Sensex’s 3.31% fall, highlighting company-specific challenges amid broader market weakness.

2. Multiple 52-Week Lows: The stock hit fresh 52-week lows on three separate days, underscoring persistent bearish momentum and weak investor confidence.

3. Elevated Trading Volumes: Several sessions recorded exceptional volumes, indicating heightened market interest but also suggesting a tug-of-war between buyers and sellers.

4. Financial and Technical Challenges: High leverage (Debt to EBITDA ratio of 9.83 times), low profitability (ROE of 0.49%), and trading below all key moving averages contributed to the negative sentiment.

5. Mixed Signals from Quarterly Results: Despite the downtrend, recent quarterly earnings showed strong profit growth and improved coverage ratios, though these have yet to translate into sustained price recovery.

Conclusion

Reliance Power Ltd’s performance during the week of 19 to 23 January 2026 was marked by a sharp decline in share price, multiple new 52-week lows, and heavy trading volumes. The stock’s underperformance relative to the Sensex and its sector reflects ongoing financial and operational challenges, including high leverage and subdued profitability. While recent quarterly results offer some positive signals, the prevailing technical indicators and investor behaviour suggest caution. The stock remains in a downtrend, trading below all key moving averages, and institutional participation has declined. Investors and market participants should closely monitor volume trends, delivery statistics, and any fundamental developments to assess whether the stock can stabilise or if further downside risk persists.

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