Reliance Power Ltd Falls to 52-Week Low of Rs.26.44 Amidst Continued Downtrend

Stock Price Movement and Market Context

On 2 Feb 2026, Reliance Power Ltd’s share price slipped to Rs.26.44, the lowest level recorded in the past year. This decline comes after two consecutive days of losses, during which the stock has fallen by 4.46%. The day’s performance saw the stock underperform its sector by 1.32%, while broader market indices showed resilience. The Sensex, after a negative opening down by 167.26 points, rebounded sharply to close 485.47 points higher at 81,041.15, a gain of 0.39%. Despite this market strength, Reliance Power remained subdued, trading below all key moving averages including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bearish sentiment.

Comparative Performance Over One Year

Over the last 12 months, Reliance Power Ltd has delivered a negative return of 31.24%, starkly contrasting with the Sensex’s positive 4.54% gain and the BSE500’s 4.46% rise. The stock’s 52-week high was Rs.76.49, highlighting the extent of the decline from its peak. This underperformance underscores the challenges faced by the company in regaining investor confidence and market traction.

Financial and Fundamental Indicators

Reliance Power’s financial profile continues to weigh on its valuation and market perception. The company’s long-term operating profit growth has contracted at a compound annual growth rate (CAGR) of -6.46% over the past five years, indicating a weakening earnings base. Additionally, the firm’s ability to service debt remains constrained, with a high Debt to EBITDA ratio of 9.83 times, reflecting significant leverage and associated financial risk.

Profitability metrics also remain subdued. The average Return on Equity (ROE) stands at a modest 0.49%, signalling limited returns generated on shareholders’ funds. Despite these challenges, the company has reported positive results for the last four consecutive quarters, with the latest six-month Profit After Tax (PAT) at Rs.112.43 crores. The Return on Capital Employed (ROCE) for the half-year period is recorded at 6.49%, the highest in recent times, while the operating profit to interest coverage ratio for the quarter is 1.63 times, indicating some improvement in operational efficiency relative to interest obligations.

Valuation and Market Sentiment

From a valuation standpoint, Reliance Power Ltd exhibits an Enterprise Value to Capital Employed ratio of 0.8, which is considered attractive relative to its peers’ historical averages. The company’s Return on Capital Employed (ROCE) of 4.8 further supports this valuation perspective. The Price/Earnings to Growth (PEG) ratio stands at 0.3, reflecting the relationship between the company’s price, earnings, and growth rate. Despite these valuation metrics, the stock’s price has not reflected these factors, continuing its downward trajectory.

Institutional Investor Participation

Institutional investors have reduced their holdings by 0.52% in the previous quarter, now collectively holding 16.32% of the company’s shares. This decline in institutional participation may reflect a cautious stance given the company’s financial profile and recent performance trends. Institutional investors typically possess greater analytical resources, and their reduced stake could be indicative of tempered confidence in the stock’s near-term prospects.

Sector and Market Dynamics

Reliance Power operates within the power sector, which has seen mixed performance in recent periods. While mega-cap stocks have led the broader market rally, smaller and mid-cap stocks like Reliance Power have struggled to keep pace. The stock’s Mojo Score of 29.0 and a Mojo Grade of Strong Sell, downgraded from Sell on 3 Nov 2025, further highlight the cautious market stance towards the company. The Market Cap Grade of 3 also reflects the company’s relatively modest market capitalisation within the sector.

Summary of Key Metrics

To summarise, Reliance Power Ltd’s share price decline to Rs.26.44 represents a continuation of a broader downtrend characterised by weak long-term growth, high leverage, and modest profitability. The stock’s underperformance relative to the Sensex and BSE500 indices over the past year emphasises the challenges faced by the company in regaining market favour. While recent quarterly results have shown some positive trends in profitability and interest coverage, these have yet to translate into sustained price recovery. Institutional investor participation has also diminished, adding to the cautious market sentiment.

Conclusion

Reliance Power Ltd’s fall to a 52-week low underscores the complex interplay of financial metrics, market dynamics, and investor behaviour influencing its stock performance. The company’s current valuation metrics suggest some degree of discount relative to peers, yet the prevailing market conditions and fundamental factors continue to weigh on the share price. As of 2 Feb 2026, the stock remains positioned below all major moving averages, reflecting ongoing downward pressure within a challenging sector environment.

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