Adani Power shares face profit booking after 35% rally, should you buy the dip?

Adani Power shares have fallen 11% in 2 days after a 35% rally, despite a 1:5 stock split and regulatory clean chit. Analysts caution that the stock is overbought and recommend buying on dips, with immediate resistance at Rs 183-185 and support at Rs 150. Brokerages are positive on the stock's long-term growth prospects, with Morgan Stanley initiating coverage with an "Overweight" rating and a price target of Rs 818.

Adani Power shares have experienced a significant drop of 11% over the past two days, following a 35% rally. This decline comes despite a 1:5 stock split and a regulatory clean chit from the Securities and Exchange Board of India (SEBI) Adani Enterprises, Adani Power & other group stocks in focus as it gets Sebi's clean chit in Hindenburg case^[2]. Analysts caution that the stock is overbought and recommend buying on dips, with immediate resistance at Rs 183-185 and support at Rs 150. Brokerages remain positive on the stock's long-term growth prospects, with Morgan Stanley initiating coverage with an "Overweight" rating and a price target of Rs 818 Adani Power tops India's private thermal sector: Morgan Stanley report gives 'overweight' rating; earnings set to triple by 2033^[3].

The recent decline in Adani Power shares can be attributed to the stock's overbought condition following the 35% rally. The stock split, which occurred on September 12, 2025, should theoretically benefit investors by making the shares more affordable. However, the market has been cautious, leading to a sell-off. The regulatory clearance from SEBI, which dismissed allegations of stock manipulation and market manipulation, was expected to boost investor confidence. Nevertheless, the stock's performance suggests that the market remains uncertain about the company's immediate prospects Adani Enterprises, Adani Power & other group stocks in focus as it gets Sebi's clean chit in Hindenburg case^[2].

Morgan Stanley's initiation of coverage on Adani Power with an "Overweight" rating and a price target of Rs 818 reflects the brokerage's long-term optimism about the company's growth prospects. The report highlights Adani Power's strong track record in turning around distressed assets, successful regulatory resolutions, and a robust balance sheet. Despite the recent volatility, analysts remain bullish on the company's long-term potential, projecting a 2.5x increase in capacity and a 3x growth in EBITDA by FY33 Adani Power tops India's private thermal sector: Morgan Stanley report gives 'overweight' rating; earnings set to triple by 2033^[3].

In conclusion, while the recent decline in Adani Power shares is concerning, the underlying fundamentals and regulatory clearance suggest that the stock could be a good long-term investment. Investors are advised to monitor the stock's performance closely and consider buying on dips, keeping in mind the immediate resistance and support levels.