Stock Performance and Market Context
On 23 Feb 2026, Reliance Power Ltd’s share price declined by 1.26% to reach Rs.25.8, the lowest level in the past year. This marks the third consecutive day of losses, with the stock falling by 5.65% over this period. The stock’s performance today lagged behind the power sector by 1.7%, highlighting relative weakness within its industry segment.
Technical indicators also point to a bearish trend, as the stock is trading below all key moving averages — including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This persistent weakness contrasts with the broader market, where the Sensex gained 0.46% to close at 83,194.25, just 3.56% shy of its 52-week high of 86,159.02. Mega-cap stocks continue to lead the market rally, underscoring the divergence between Reliance Power and the overall market momentum.
Long-Term Performance and Valuation Metrics
Over the last year, Reliance Power has delivered a negative return of 31.24%, significantly underperforming the Sensex’s positive 10.49% return and the BSE500’s 13.01% gain. The stock’s 52-week high was Rs.76.49, indicating a steep decline of over 66% from its peak.
From a valuation standpoint, the company’s Return on Capital Employed (ROCE) for the half year stands at 6.49%, with a trailing ROCE of 4.8%. The enterprise value to capital employed ratio is 0.8, suggesting the stock is trading at a discount relative to its peers’ historical valuations. Despite this, the company’s financial metrics reveal underlying challenges that have weighed on investor sentiment.
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Financial Strength and Profitability Concerns
Reliance Power’s long-term fundamental strength remains weak, as evidenced by a negative compound annual growth rate (CAGR) of -6.46% in operating profits over the past five years. The company’s ability to service its debt is limited, with a high Debt to EBITDA ratio of 9.83 times, indicating significant leverage and potential strain on cash flows.
Profitability metrics further highlight challenges, with an average Return on Equity (ROE) of just 0.49%, signalling minimal returns generated on shareholders’ funds. Institutional investor participation has also declined, with a reduction of 0.52% in their stake over the previous quarter, leaving them holding 16.32% of the company’s shares. This decrease in institutional ownership may reflect cautious sentiment among investors with greater analytical resources.
Recent Earnings and Operational Highlights
Despite the stock’s subdued performance, the company has reported positive results for the last four consecutive quarters. The latest six-month Profit After Tax (PAT) stood at Rs.112.43 crores, reflecting a notable increase. Operating profit to interest coverage ratio for the quarter reached 1.63 times, the highest in recent periods, indicating improved capacity to meet interest obligations.
Profit growth over the past year has been substantial, with profits rising by 143.6%, resulting in a low Price/Earnings to Growth (PEG) ratio of 0.3. These figures suggest operational improvements, although they have not yet translated into share price gains.
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Market Position and Outlook
Reliance Power operates within the power sector, which has seen mixed performance relative to the broader market. While the Sensex and mega-cap stocks have shown resilience and gains, Reliance Power’s share price has continued to decline, reflecting company-specific factors rather than sector-wide trends.
The company’s Mojo Score currently stands at 29.0, with a Mojo Grade of Strong Sell, an upgrade from the previous Sell rating on 3 Nov 2025. The Market Cap Grade is 3, indicating a relatively modest market capitalisation compared to larger peers. These ratings underscore the cautious stance reflected in the stock’s valuation and trading levels.
Summary of Key Metrics
To summarise, Reliance Power Ltd’s key financial and market metrics as of 23 Feb 2026 are:
- New 52-week low price: Rs.25.8
- 1-year stock return: -31.24%
- Sensex 1-year return: +10.49%
- Debt to EBITDA ratio: 9.83 times
- Average ROE: 0.49%
- Latest 6-month PAT: Rs.112.43 crores
- Operating profit to interest coverage (quarterly): 1.63 times
- Mojo Score: 29.0 (Strong Sell)
- Market Cap Grade: 3
These figures illustrate the stock’s current valuation challenges and the financial pressures faced by the company, which have contributed to the recent share price decline to its 52-week low.
Conclusion
Reliance Power Ltd’s fall to Rs.25.8 marks a significant milestone in its share price trajectory, reflecting a combination of weak long-term growth, high leverage, and subdued profitability metrics. While recent earnings have shown improvement, the stock continues to trade below all major moving averages and has underperformed both its sector and the broader market indices over the past year. Institutional investor participation has also diminished, adding to the cautious market sentiment surrounding the stock.
As the company navigates these challenges, its current valuation and financial metrics remain key factors influencing its market performance and investor perception.
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