Shares of Reliance Industries Ltd (RIL) experienced a decline of 4% during a significant market crash in early trading today. The stock price fell by 4.01% to ₹1,285.35, compared to the previous close of ₹1,339.10 on the Bombay Stock Exchange (BSE). As a result, the company's market capitalisation decreased to ₹17.48 lakh crore.
A total of 7.25 lakh shares changed hands, contributing to a substantial turnover of ₹94.46 crore, marking the second-largest trading volume on the BSE. The stock had previously reached an all-time high of ₹1,608.95 on July 8, 2024, but has since dropped to a 52-week low of ₹1,149.08 on November 10, 2023. Year-to-date, RIL shares have lost 0.30%, while the stock has risen 11.34% over the past year.
The relative strength index (RSI) for RIL shares currently stands at 36.4, indicating that the stock is trading within a neutral range, neither in the oversold nor overbought territory. The stock has a beta value of 1.2, suggesting a high level of volatility over the past year.
Furthermore, RIL shares are trading below the 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, which could point to a challenging trading environment for investors looking to make share market investments.
Despite the recent dip in share price, analysts reiterated their buy rating on the large-cap stock. Brokerages noted that RIL's stock performance has lagged behind broader market trends, yielding only 5% returns year-to-date compared to the Nifty 50's 15% increase.
Analysts believe this underperformance may reverse, bolstered by anticipated telecom tariff hikes, a recovery in the retail sector, and positive developments in the new energy business.
The brokerage anticipates a strong earnings growth momentum across various segments, projecting a 15% compound annual growth rate (CAGR) in profit after tax (PAT) from FY24 to FY27.
While people are optimistic about RIL's prospects, the brokerage has identified three significant risks that could impact its projections:
Some major brokerage firms expressed a positive outlook on Reliance's future, citing large technological advancements and ambitious growth targets across its Retail, Telecom, and new energy sectors.
The company is expected to become a key growth driver over the next two to three years. Reliance aims to double its EBITDA within five years, driven by opportunities in 5G, increased investments in artificial intelligence and data centres, expansion in the Retail sector, and the launch of production facilities for electric vehicles and batteries in the new energy segment. They have estimated a consolidated revenue, EBITDA, and PAT CAGR of approximately 19%, 14%, and 16%, respectively, over FY24-26.
The current dip in Reliance Industries shares, amid a broader market crash, presents a complex scenario for investors. While the share price has decreased, the surge in turnover and the positive outlook from analysts may present opportunities for share market investment.
With the company focused on growth in several high-potential areas, stakeholders will be keen to monitor how these developments unfold in the coming months. As always, investors should remain vigilant of the associated risks while considering their next steps in share market investment.
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