Adani Power and Tata Power are two of investors’ most sought-after bets in the energy sector. Apart from the industry, another factor that’s common between the two stocks is that they are both part of major Indian conglomerates.
At the outset of the year, both stocks’ performance was sluggish, with both reaching record lows earlier in the year. The following chart shows that both the energy giants experienced a dip at the start of the year and were on a downtrend up until March before slowly bouncing back up.
Tata Power shares, up until March were following a downward trajectory hitting a new 52-week low of ₹182.35 on March 28. Adani Power, hit by the Hindenburg report, had a significantly greater fall hitting its 52-week low of ₹132.40 on Feb.28.
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However, since then, the stocks have surged up and have also gone on to hit new 52-week highs. Tata Power surged up over 50% from its 52-week low to hit a new 52-week high of ₹276.50 on Sept. 8. Adani Power, coming back as strongly as it went down, surged up over 200% from its 52-week low to hit its 52-week high of ₹409.70 around the same time on Sept. 12. In fact, Adani Power’s recovery has been the best among all other Adani Group’s listed stocks.
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Now, with both stocks taking this rollercoaster ride over the last year, which of them would have been a better bet?
The chart shows that despite Adani Power’s meteoric comeback, Tata Power clinches it by a fair margin. The chart depicts the trajectory of a ₹1,000 investment made in both companies a year back. A ₹1,000 investment in Tata Power would be worth around ₹1,168 today (Oct. 5), while a similar investment in Adani Power, would have been worth around ₹1,005.
It is also clear from the chart, that the Adani Power investment would have seen extreme volatility while Tata Power offered more stability. Consequently, one could also argue that the Adani Power investment has been way risky than the investment in Tata Power over the last year.
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