The BSE Sensex has gained 3.4 per cent in the last week alone.
Still, there are many stocks that are well below their 52-week highs. Equity sell-off hasn’t spared even the most stable bluechip stock,
However, there are some companies that have survived the bloodshed.
is one of them Adani Power, The stock is up more than 20% in the past month. Why?
Let’s dig deeper to understand what’s driving the stock’s rally.
Inclusion in the MSCI Index
The utilities company’s stock has gained over 20% last month after index provider MSCI (Morgan Stanley Capital International) included Adani Power in its global index.
Adani Power was not the only company to be included in the index.
From India, MSCI added 3 more stocks – AU Small Finance Bank, Jindal Steel & Power, and Tata Alexei. It also superseded HDFC AMC.
MSCI on May 13 announced the list of additions and deletions for the May 2022 rejig. Global index provider MSCI rebalances its indices semi-annually and quarterly.
To be eligible for inclusion in the MSCI Index, a security’s foreign inclusion factor (FIF) must reach a certain threshold.
The FIF of a security is defined as the proportion of outstanding shares that are available for purchase by international investors on the public equity markets.
The changes announced by MSCI will be effective from June 1, while index funds are likely to restructure their portfolios on May 31.
What does the future of Adani Power look like?
The company said electricity demand in India continues to grow, driven by both economic growth and heatwaves in the north-western parts of the country.
As a result, in the most recent quarterly results, it reported a 93% year-on-year increase in revenue.
The company’s total revenue for the quarter was against 133 billion 69 billion in the same quarter last year. Revenue included the revenue of the previous period 29.5 billion and prior period other income 19.8 billion
During the quarter, the company’s wholly owned subsidiary, Adani Power Rajasthan, received payment of domestic coal shortage claims along with cost and delayed payment surcharge from Rajasthan discoms as per the February 27 order of the Supreme Court.
Due to increase in revenue, the company’s operating profit grew by 271% y-o-y to 79.4 billion 21.4 billion in the same quarter last year.
As a result, the company registered a manifold increase in net profit. compared to 46.5 billion 130m in the March 2021 quarter.
For FY 2022, it registered 68% YoY growth in revenue. Net profit also increased by 50% from FY21, driven by volume growth and price increases.
How has the Adani Power stock fared recently?
to like Stock in Adani GroupAdani Power shares have been a huge hit.
The stock is up 240% in 2022 compared to a 5.5% fall in the BSE Sensex.
The company’s shares have risen up to 270 per cent in the last one year, while the BSE Sensex has gained only 7.7 per cent.
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About Adani Power
Adani Power is a subsidiary of the Indian conglomerate Adani Enterprises.
The company is engaged in the business of power generation, accumulation, distribution and power supply.
It is a private thermal power producer with a capacity of 12,450 MW. It also operates a 40 MW Mega Solar Plant at Naliya, Bitta, Kutch, Gujarat.
It is the first company in India to synchronize supercritical technology.
The company has signed about 9,153 MW power purchase agreements with the governments of Gujarat, Maharashtra, Haryana, Rajasthan, Karnataka and Punjab.
To know more about the company, visitFact Sheet of Adani PowerAndquarterly results,
Disclaimer: This article is for informational purposes only. This is not a stock recommendation and should not be treated as such.
(This article is syndicated from) equitymaster.com,