Reliance Power (RPOWER)
TurnaroundFairStock Score: 30/100 — RISKY
Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹22.98 |
| Market Cap | ₹9,504 Cr |
| P/E Ratio | 35.07 |
| ROCE | 6.15% |
| ROE | 1.73% |
| Dividend Yield | 0% |
| Profit Growth | 47.2% |
| Debt/Equity | 0.92 |
| Sales Growth | 3.8% |
| Free Cash Flow | ₹2,388.59 Cr |
| Promoter Holding | 24.98% |
| 52-Week Range | ₹15.96 — ₹47.75 |
| Sector | Power |
| Book Value | ₹38.78 |
AI Analysis
AI-generated, general educational analysis — not personal investment advice.
At first glance, a stock at ₹30.09 against a book value of ₹39.50 looks like the kind of asset bargain Graham might examine. But I have learned that a low price-to-book is worthless if the business cannot earn a return on those assets. Reliance Power's ROE is 1.73% and ROCE is 6.15%; that is barely above the cost of capital, if at all. Net profit collapsed 88.34% while sales grew only 1.43%. In the latest quarter, it earned ₹25 Cr on ₹1,873 Cr of revenue - a razor-thin margin. This is not an operating franchise with a moat; it is a capital-heavy power generator struggling to generate acceptable profits. The balance sheet is not comforting either. Debt/equity is 0.93, and with such low returns, debt service consumes cash. The Altman Z-score of 0.91 puts it in the distressed zone, and EV/EBITDA of 444.51 tells me the market's earnings multiple is meaningless because EBITDA is too low. The DCF intrinsic value of ₹6.74 is far below the current price, so the market is paying for a recovery that I cannot justify from the numbers. Promoter holding of 24.98% is low for an Indian power company, and zero dividend means shareholders wait indefinitely for returns. Positives exist: free cash flow is a healthy ₹2,389 Cr and the Piotroski F-score of 7/9 shows some short-term fundamental health. Also, the stock trades at 0.76 times book. But one good cash flow snapshot does not make a compounder. Graham would demand a tangible margin of safety. Here, the earnings power is weak, the solvency score is poor, and the FairStock Score of 30/100 labels it risky. This is a possible turnaround or asset play, not a stalwart. I would keep it on a watch list and require clear evidence of profit recovery and debt reduction before deploying capital.
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Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer