RattanIndia Power Limited is one of India’s largest private power generation companies. It operates thermal power plants with a total installed capacity of 2,700 MW, located in Amravati and Nashik in Maharashtra, India.
The company was originally incorporated in 2007 as Sophia Power Company Limited and later changed its name to Indiabulls Power Limited. In 2014, it was carved out of the Indiabulls group and renamed as RattanIndia Power Limited.
In this article, we will explore different factors and use fundamental and technical analysis to estimate the target stock price of Rattan Power by 2025.
What is the Price Target of Rattan Power share by 2025?
Rattan India Power’s stock currently trades at approximately Rs. 4.15 per share. According to market analysis and expert opinions, the price target for Rattan India Power stock by 2025 is expected to range between Rs. 6 and Rs. 7 per share.
It’s important to note that these projections are subject to market conditions, industry trends, and the company’s performance in the upcoming years.
To make an informed investment decision, it’s essential to conduct a comprehensive analysis that combines fundamental and technical aspects of Rattan India Power’s performance.
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Fundamental Analysis of Rattan India Power Stock
Rattan Power has witnessed an average revenue growth, with a compound annual growth rate (CAGR) of 9% over the past five years. This upward trajectory is driven by the revenue of Rattan India Power has witnessed significant growth in recent years. Even in the last 3 years, RattanIndia Power’s revenues rose by almost 34% each year.
In FY22, the revenue from the operation of power plants accounted for approximately 77% of the total revenue, marking a substantial increase from 52% in FY21. Furthermore, their net profit margin has consistently improved, reaching an average of 8% in the last three years.
On the other hand, there has been a notable decline in income from the embedded lease of power plants. In FY22, this income source accounted for only 23% of the total revenue, representing a significant decrease from 48% in FY21.
One primary concern for Rattan Power is its large debt. But they made a deal with their lenders to settle the debt in December 2019. Since then, they’ve been making early payments and paid Rs 2,530 crore towards the debt from January 2020 to June 2022.
As of June 30, 2022, they have repaid 64% of their total debt. They also negotiated lower interest rates on some of their debt, which saved them a lot of money.
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Technical Analysis of Rattan India Power Stock
Rattan India Power’s stock price has been in a bearish trend if you see the last one-year price trend from June 2022 to June 2023.
However, the energy stock is in a bullish trend since June 2020, with the stock price increasing from INR 1.90 to Rs 4, doubling investors’ money in just 3 years.
Technicals are showing neutral views with the stock’s relative strength index (RSI) at 72.1 showing it in an overbought zone but the estimated moving average 200 (EMA 200) indicates a strong bullish sentiment, suggesting potential upward momentum in the coming years.
Experts believe that the stock could keep the momentum in the coming months. If this happens, the stock could potentially touch the range of Rs 6.
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Factors Affecting Rattan Power’s share price in 2025
Let’s explore some key considerations in the context of Rattan India Power:
- Debt reduction: A primary factor that can affect Rattan India Power’s stock performance is its progress in reducing debt. Higher debt levels have already created a financial burden and impacted the company’s ability to invest in growth opportunities. So, you should closely monitor Rattan India Power’s efforts to reduce debt and improve its financial health. Successful debt reduction initiatives can enhance the company’s overall stability and potentially have a positive impact on its stock price.
- Industry and market trends: The power sector in India is projected to grow rapidly, presenting opportunities for Rattan India Power to expand its operations and generate higher revenues. Keeping a close eye on industry trends will help gauge the company’s potential growth and its impact on the stock price.
- Government policies and regulations: Rattan India Power operates in a regulated industry, and any changes in government policies or regulations can significantly influence the company’s operations and financial performance. Staying informed about policy developments and their potential impact will be important for understanding the stock’s future trajectory.
- Competition from other power companies: The power sector in India is highly competitive, with both established players and emerging competitors vying for market share. Increased competition can impact Rattan India Power’s market position and earnings potential, which in turn can affect the stock price.
- Technology and innovation: The power sector is undergoing rapid technological advancements, particularly in the realm of renewable energy. Rattan India Power’s ability to adapt and embrace innovative technologies can have a significant impact on its future performance and stock price.
- Environmental and social factors: With increasing emphasis on sustainability and ESG considerations, any adverse environmental or social impact resulting from Rattan India Power’s operations can impact investor sentiment and, consequently, the stock price. Assessing the company’s environmental and social practices can provide insights into its long-term viability.
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Rattan Power’s Financial Performance in Recent Years
Rattan Power’s financial performance in recent years has been characterized by fluctuations in both revenue and net profit. The company experienced a decline in revenue in 2020 and 2021, followed by a significant growth in 2022.
| Year | Revenue (in crores) | Revenue Growth (%) |
| 2020 | 1,774 | -7 |
| 2021 | 1,560 | -12 |
| 2022 | 3,260 | 108 |
| 2023 | 3,231 | -0.89 |
However, the net profit figures show a different trend, with negative growth in 2020 and 2021, followed by a notable improvement in 2022.
| Year | Net Profit (in crores) | Profit Growth (%) |
| 2020 | 165 | -104.96 |
| 2021 | -942 | -670.91 |
| 2022 | -1,981 | 110.30 |
| 2023 | -1,870 | -5.60 |
You must consider these fluctuations and delve deeper into the underlying factors that contributed to these results before making any investment decisions.
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Conclusion
Rattan Power’s financial performance in recent years has been volatile, with fluctuations in revenue and net profit. While the company experienced significant revenue growth in 2022, the profitability figures have shown mixed results.
If the market gives a bull run and things like debt reduction and electricity price rise may help Rattan India Power shares to rise to Rs 6-7 range by 2025.
It is crucial for you to conduct a thorough analysis and consider the underlying factors before making any investment decisions.
You can also read about other energy stocks’ target prices –
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FAQs
While Rattan Power exhibits promising growth potential, it’s essential to evaluate your risk tolerance and investment objectives. Consider consulting with a financial advisor to make an informed decision based on your individual circumstances.
You can stay informed by regularly monitoring Rattan Power’s financial reports, official announcements, and news related to the renewable energy industry. Financial news platforms and investment websites can be valuable sources of information as well.
Yes, you can refer to Rattan Power’s investor relations section on their official website. Additionally, industry publications, analyst reports, and financial research platforms can provide comprehensive insights into the company’s performance and outlook.
