Multibagger Stock: Reliance Power shares hit 52-week high, up 900% in 3 years; should investors consider buying?

livemint.com:

Reliance Power have given exceptional returns in the last 3 years. The stock has surged from ₹3.3 in January 2021 to currently trade at its 52-week high of ₹33, soaring as much as 900 percent in these 3 years. The stock has also given multibagger returns in the last 1 year, jumping 114 percent.

Just in the 5 sessions of January, it has advanced almost 36 percent, extending gains for the 3rd straight month. Meanwhile, it rose 10.17 percent in December 2023 and almost 24 percent in November 2023. Extending gains for the 6th consecutive session, the stock has gained 8 percent in intra-day deals today, on Friday, January 5, 2024.

Between December 29 and January 5, it has advanced 47.6 percent. It has surged 264.5 percent from its 52-week low of ₹9.05, hit on March 28, 2023. The year 2023 was very strong for the power company.

It gave positive returns in 9 of the 12 months last year and was in the red in just 3 months - January (down 11.15 percent), February (down 23.14 percent) and October (down 11.17 percent). On the other hand, it soared the most in November, up 23.68 percent, followed by April, up 22.61 percent, and July, up 17 percent. Stock market experts have noted a bullish trend in power stocks, primarily driven by expectations of tariff hikes.

In recent months, there has been a surge in buying interest for most power stocks. The optimism in the market is likely fueled by the anticipation of increased tariffs, which could positively impact the financial performance of power companies. Investors may be drawn to these stocks as they foresee potential profitability and growth in the power sector.