Reliance Industries shares plunge 4% amid market crash

Reliance Industries Ltd (RIL) saw its shares drop 4% during early trading today (November 4), reflecting a significant downturn in the broader market. The stock fell by 4.01%, trading at Rs 1,285.35, down from the previous close of Rs 1,339.10 on the Bombay Stock Exchange (BSE). This decline reduced the company's market capitalization to Rs 17.48 lakh crore.

Approximately 7.25 lakh shares changed hands, resulting in a turnover of Rs 94.46 crore, marking the second-highest trading volume on the BSE for the day. RIL shares reached an all-time high of Rs 1,608.95 on July 8, 2024, but have since dropped to a 52-week low of Rs 1,149.08 on November 10, 2023.

So far this year, RIL's stock has dipped by 0.30%, although it has risen 11.34% over the last twelve months. Technical analysis shows that the relative strength index (RSI) for RIL is currently at 36.4, suggesting that the stock is in a neutral trading zone. The stock’s beta of 1.2 indicates a high level of volatility over the past year, and it is currently trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages.

Domestic brokerage firm JM Financial said, “RIL’s stock price has under-performed broader markets with just 5% returns in CY24YTD versus 15% return for Nifty-50. We believe that this under-performance could reverse supported by faster-than-anticipated telecom tariff hikes by telcos', recovery in retail business and positive announcements on new energy business. Earnings growth momentum to remain strong across segments and we expect 15% PAT CAGR over FY24-27E.”

The brokerage outlined three key risks to its forecast for RIL stock: 1) Continued high capex, resulting in rising net debt with limited earnings visibility from new projects; 2) Weak subs addition limited ARPU hike; and 3) Weak downstream margins due to macro concerns.

As per reports quoting HDFC Securities, a leading stock broking company & subsidiary of HDFC Bank, “Given the large technological advancements and ambitious growth targets, Reliance’s Retail, Telecom, and new energy segments are poised to become the upcoming growth drivers over the next two to three years. The company aims to double its EBITDA in the next five years, powered by 5G opportunities, increased investments in AI/data centres, further expansion in Retail and the start of PV/battery facilities in New Energy. The company could report a consolidated revenue/EBITDA/PAT CAGR of approx. 19%/14%/16% over FY24-26E.”