Reliance Industries share rises 10% in two sessions; is the stock headed for record high?

Reliance Industries Ltd (RIL) share zoomed for the second straight session today after brokerage Jefferies raised its target price for the market heavyweight. In two sessions, the share has gained over 10%.  On Friday, the large cap stock closed 6% higher at Rs 2,094.90 on BSE.

RIL share touched an intraday high of Rs 2,191.5  rising 4.61% on BSE. Reliance Industries stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The share has risen 48% in one year and gained 9.25% since the beginning of this year.

Market cap of the firm rose to Rs 13.67 lakh crore on BSE. Total 19.65 lakh shares amounting to turnover of Rs 423 crore changed hands on BSE. The share hit its all-time high of Rs 2,368.20 on September 16, 2020 and fell to its 52-week low of Rs 1,453 on May 29, 2020.  Later, the stock closed 3.13% higher at Rs 2,160 on BSE.

Last week, Jefferies set the base target for the RIL stock at Rs 2,580. It suggested an upside scenario target of Rs 3,150, a 59 per cent rise over Thursday's closing price.

The brokerage said it saw a 50 per cent upside in the refiner's earnings before interest, tax, depreciation and amortisation (EBITDA) for petrochemical business if the prevailing momentum sustains.

A sustained strong performance by the petrochemical vertical will improve the likelihood of  oil-to-chemical (O2C) business stake sale in FY22 and may lead to a reversal of the 40 per cent underperformance in the Nifty pack, it said.

The stock has carried forward positive momentum from last week.  Is it heading for record high?

Here's what experts said.

Yash Gupta, Equity Research Associate at Angel Broking said, "We have seen a major consolidation in the stock in the last 3 months and it has underperformed Nifty. In the last 3 months, Nifty has rallied 900 points while Reliance has corrected by 2% despite RIL being the highest weightage stock in Nifty. Commodity prices in the international market are in upward momentum, same as with petrochemical products prices also. Prices of almost all petrochemical products have hit yearly high. With this, company's realisation will improve along with EBITDA margins for the next couple of quarters. As per the market news , for BPCL disinvestment, government may give some relaxation in FDI rules. Any positive news will be good for Reliance Industries also.

We expect the stock to be in upward momentum and may touch the levels of Rs 2,200 to Rs 2,250 in the coming week."

AR Ramachandran, Co-founder & Trainer, Tips2Trades said, "Estimated rise in petrochemical margins, supposed tie-up with Infibeam & Google for a digital payments network with sustained strong performance of Reliance Retail has led to an amazing intraday rally on Friday.

Even though Friday's move was supported by strong volumes, Reliance still faces resistance at 2,115. Close above this level could pave way for Rs 2,244- Rs 2,458 levels in the coming weeks. Rs 2030 now becomes strong support in this week."