Reliance Industries (RIL) stock price may be on the verge of a strong upside move after forming a potential triple bottom at 52 week’s EMA, said analysts at ICICI Direct. The brokerage firm sees strong fundamental and technical reasoning for RIL stock to soar higher. “The telecom sector has shown resilience despite recent elevated volatility. One of the preferred proxy plays for the sector is Reliance Industries,” the brokerage firm said. So far this year, Mukesh Ambani-led Reliance Industries’ stock price has gained 1.65%, outperforming the benchmark Nifty 50 which is down 2%. On Friday, Reliance Industries stock price began trading at Rs 2,435 per share.
Analysts believe RIL has formed a potential triple bottom at 52 weeks’ EMA. “This has been held on multiple occasions since April 2020, coinciding with September 2020 resistance zone of Rs 2,370 thereby, offering favourable risk-reward setup,” they said in a note. “Over the past three months, the stock has retraced 61.8% of August-October 2021 rally (Rs 2,016-2,751) at Rs 2,300. Slower pace of retracement indicates inherent strength,” they added. The brokerage firm believes the stock could rally to Rs 2,670 per share which translates to a 10% upside from today’s opening of Rs 2,435 apiece.
On the Fundamental side, Reliance Industries is one of India’s biggest conglomerates with a presence in refining & marketing and petrochemicals, oil & gas exploration, retail, digital services and media, making it a well-diversified business entity. At the EBITDA level in the nine months of the fiscal year, O2C and oil & gas contributed 50% while retail, digital and others contributed 10%, 34% and 6%, respectively. “Steady cash flow from O2C segment is expected to continue as we estimate stability in GRMs and higher global gas prices augur well for oil & gas exploration segment. Strong balance sheet post fundraising supports the company’s aggressive expansion in new energy verticals,” ICICI Direct said.
The oil to telecom conglomerate has recently forayed into green energy with plans to repurpose its Rs 30,000 crore gasification assets for clean energy. Global brokerage firm Morgan Stanley is overweight on the stock with a target price of Rs 2,926 per share dubbing it as the most attractive risk-reward in the Indian energy space.
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