RIL jumps after foreign broker issues 'buy' rating

Reliance Industries (RIL) rose 2.77% to Rs 2262.50 after foreign broker recommended buying the stock for a target price of Rs 2,970, implying a 35% upside from current levels.

The foreign broker said RIL is a bargain buy now. The stock is trading at just 5% above its conservative valuation based on a nearly 3-year-old deal value for Reliance Jio and Reliance Retail, a 15% discount to the announced Aramco deal value for its O2C business, and nil value for the new energy business, the research report said.

"The ramp-up of its FMCG business, launch of Airfiber to catapult wireless broadband penetration and a new affordable 5G smartphone to monetise its pan-India standalone 5G network by end-2023 along with an IPO of Jio and/or retail are all possible large triggers in 2HFY24," the report added.

The RIL stock tumbled 8.93% in the past eight trading sessions. The stock hit a 52-week high of Rs 2,855 on 29 April 2022. The stock hit a 52-week low of Rs 2,180 on 20 March 2023.

The stock underperformed the market over the past one month, falling 7.02% compared with 4.40% fall in the Sensex.

The scrip underperformed the market in past one quarter, sliding 12.42% compared with 5.02% decline in the Sensex.

The scrip underperformed the market in past one year, correcting 8.25% compared with 1.24% rise in the Sensex.

On the technical front, the stock's daily RSI (relative strength index) stood at 40.84. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30.

On the daily chart, the stock was trading below its 50-day, 100-day and 200-day simple moving average (SMA) placed at 2376.11, 2485.68 and 2502.74, respectively.

RIL is India's largest private sector company. Its activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, renewables (solar and hydrogen), retail and digital services.

On a consolidated basis, net profit of RIL declined 2.8% to Rs 15,792 crore on 17.4% increase in net sales to Rs 2,17,164 crore in Q3 December 2022 over Q3 December 2021.

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