Rattan India Power is a private sector power generation player with capacity in Maharashtra. It is part of the parent organization – Rattan India.
The total installed capacity of 2,700 MW (link)
The stock price has run up with the entire market giving a return of more than ~150%
The stock has shown this performance owing to the following reasons:
Despite this, there are red flags
- High capex cost linked to thermal power plant installation
- Running costs linked to the power plants
- Debt/Equity close to 1
- Dependence on commodities like coal for power generation that are susceptible to demand and price fluctuations which can eat into profits made
Taking this into account, the parent organization(Rattan India) has tried to diversify into newer areas like Fintech(WeFin), Drones (Neosky), and e-commerce (Cocoblu).
Some developments along this line
- Buying of Electric Bike Manufacturer – Revolt Motors
- Order of E-bikes from Adani Green Energy (Link) and capacity expansion (Link)
This will aid Rattan India Power to draw synergy wherever feasible with other business verticals for better bottom-line growth.
It would be premature to state that one year is a good time horizon but the company has an able management and diversified business to bring more value to its shareholders.
Hope this helps
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