At a Glance

Reliance Power has risen like a phoenix — or more like a magician pulling rabbits (read: “other income”) out of a SEBI-compliant hat. From negative profits to sudden ₹3,000 Cr “income”, the stock is up 1,000%+ from COVID lows. But is the power real, or just electricity in the books?

⚡️ TL;DR

• 💥 Stock is up >1000% from ₹3 lows in 2020 to ₹63 in 2025
• ⚰️ FY20-FY24: Continuous losses, no dividend, and negative ROEs
• ⚖️ FY25: Surprise ₹2,948 Cr profit… but ₹3,905 Cr of it is other income 😬
• ⚡ Power capacity = 5,945 MW (mostly thermal), but execution has lagged
• 🔋 Renewables push: 500 MW in Bhutan + 350 MW in India under NU Energies
• 🧾 Book Value: ₹40.7 | CMP: ₹63.6 → 1.56x P/B, fair for power cos
• 🔄 Debt reduced from ₹30,000 Cr+ to ₹15,153 Cr in 5 years
• 🚩 Still 0% dividend, negative average ROE over 5 years

🕯️ Reliance Power: The Zombie That Refused to Die

Once a poster boy of Anil Ambani’s empire, RPower was dead money for a decade. Losses mounted. Power projects stalled. Investors cried.

And then… suddenly… in FY25:
₹2,948 Cr net profit.
₹3,905 Cr “other income”.

Coincidence? Surely not.
It’s as if CA firm said: “Beta, kuch toh karna padega!”

📊 Financials: Real Power or Excel Power?

* ROE helped entirely by one-time “other income”

Verdict?
If Other Income was a power source, Reliance Power could light up the Moon.

🧨 Projects, Debt & Reality Check

• Installed capacity: 5,945 MW (5,760 MW thermal, 185 MW renewable)
• Debt reduction: From ₹30,000+ Cr in FY15 to ₹15,153 Cr in FY25
• Bhutan solar: ₹2,000 Cr investment — biggest FDI in Bhutan history
• NU Energies (subsidiary): Winning solar + battery storage bids
• But actual revenue growth? Flat. 5-year CAGR: 0%
• Power output hasn’t matched project announcements yet.

🤡 So What’s This “Other Income”?

• ₹3,905 Cr in FY25
• More than 50% of FY25 total income
• Company hasn’t fully broken down the source yet
  (Sale of assets? Debt restructuring? Accounting gains? All probable.)

Basically, the company made more money off the grid than from power generation.

🧑‍🏫 Promoter Drama & Shareholding

• Retail janta loves RPower again 💕
• No major FPOs or new capital infusion yet
• Small cap index darling? Or sitting duck?

🎯 Fair Value Range

Let’s give it a stab — assuming some sane valuation logic.

• Current P/B: 1.56x
• Power sector avg: ~1.2x for thermal-heavy players
• Book Value: ₹40.7

🧮 Fair Value Range = ₹45 – ₹55, assuming stable ops and no “magical income”

Stock’s at ₹63.6 → slightly overvalued, unless solar pipeline delivers fast.

🚨 Red Flags Investors Can’t Ignore

• 🧾 Operating profit down 60% from FY21
• 📉 Revenues flat since 2015
• 💣 Profits have been one-time gains, not core performance
• 🧂 No dividend in 15+ years
• 📉 Negative 10-year ROE
• 😮 Other income accounts for more than 100% of FY25 PAT

🌈 So… Multibagger or Mirage?

✅ Why Bulls are Excited:

• Solar pivot + clean energy push
• Fewer write-offs recently
• Debt shrinking, balance sheet improving
• Cheap stock when compared to Adani Green/JSW Energy

❌ Why Bears Are Growling:

• Growth missing in action
• Core operations weak
• Profit spike = mostly financial engineering
• Solar projects not yet operational

🧠 EduTake

RPower is no longer the bankrupt beast it once was. But it’s not quite the renewable rockstar either. For now, it’s a halfway house — stuck between redemption and rerating.

If solar bets convert, it might power up again.
If not, the fuse might blow… again.

✍️ Written by Prashant | 📅 June 22, 2025
Tags: Reliance Power, Anil Ambani, Solar Projects, NU Energies, Other Income, Power Stocks, PSU vs Private Power, Renewable Energy, Bhutan Solar FDI, Indian Smallcap Stocks