Shares of two Telugu Desam Party-linked companies, Amara Raja Energy & Mobility Ltd. and Heritage Foods Ltd., have been rallying ever since the party chief won big at the elections.
Amara Raja Energy's stock rose as much as 9.5% on Thursday. Although Chandrababu Naidu himself does not hold a stake in the automotive batteries company, the current managing director, Galla Jayadev, is a former TDP Leader. Naidu's expected return to Andhra Pradesh as chief minister and his stronghold in the state has led to this surge in stocks.
Heritage Foods has also seen a total gain of 37.25% in the past four days. The company's promoters, Bhuvaneswari Nara and Nara Lokesh, are the wife and son respectively of Naidu.
Amara Raja Energy's stock rose as much as 9.5% during the day to Rs 1,333 apiece on the NSE. It was trading 7.83% higher at Rs 1312.7 per share, compared to a 1.03% advance in the benchmark Nifty 50 as of 11:33 a.m.
The share price has risen 112.22% in the last 12 months. The total traded volume so far in the day stood at 5.1 times its 30-day average. The relative strength index was at 65.5.
Eight analysts tracking Amara Raja Energy have a 'buy' rating on the stock, four recommend a 'hold' and five suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 15.8%..
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