Reliance Power, Reliance Infrastructure have doubled this year, should you buy?

Besides, its consolidated income during the March quarter rose to Rs 4,611 crore against Rs 4,013 crore in the year-ago period.

Analysts, however, are not convinced with the fundamentals of these two stocks. "Overall fundamentals of both the stocks are not good, so better to keep them as short and medium-term bets," said Nitin Shahi, Executive Director, FINDOC.

Reliance Infrastructure was in news recently for its stake sale in Mumbai Metro Project for about Rs 2,500-2,600 crore, which was fuelling the rally, he said.

On technical charts, a lot of buying was observed on the daily chart and volume was two-three of average volume traded, Shahi said.

"One can hold on to positions with a strict stop loss of Rs 55 for the targets of Rs 80-100," he said.

"This stock can move towards the levels of Rs 10-11. Take stop loss below Rs 7," said Shahi.

Vinit Bolinjkar, Head of Research, Ventura Securities said the gains were speculative trade. "While we do not have active coverage on both the stocks, we believe investors are speculating that the fair value of the assets is much higher against the debt in the balance sheet. In a bull market, interest always catches up in such stocks," said Bolinjkar.

Reliance Infra recently sold a commercial property in Mumbai’s Santacruz to repay Rs 1,200 crore to Yes Bank, boosting the share price.

"In general, we advise investors to stay away from such speculation and concentrate on good fundamental companies as such so-called value plays can often lead to falling in a trap," Bolinjkar said.

Deepak Jasani, Head of Retail Research, HDFC Securities, said the market had reached such a stage that traders were punting on stocks that had fallen on bad times after a decent past.

"A lot of expectation buildup will happen, anticipating reasons for turnaround in the company's fortunes. Old holders of stock (institutional and non-institutional) who have seen low prices take this opportunity of selling these shares while traders are playing with the higher float," said Jasani.

"Both the companies have made defaults and delays in making payments to the bank loan facilities, witnessed deterioration in the credit profile and weakening of financial and debt servicing owing to substantial losses in the recent past, though the latest results show some signs of a turnaround," he said.

Retail and HNI traders wish to make attractive percentage return on their investment and hence look to make a quick buck in low-value stocks while undertaking higher risks.

A sustained turnaround in the fortunes of the companies, debt resolution and further selloff of some valued assets, while retaining some key assets could invite investment interest from long-term investors, Jasani said.

Analysts are not convinced that these two stocks are long-term buys. Despite their mouth-watering gains, a lot of concerns persist that make the outlook of these two stocks hazy.

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