Reliance Industries shares slip over 7% in a month, what lies ahead?

Shares of Reliance Industries Ltd (RIL) have lost over 7 percent in a month amid high volatility in the market. The stock, which closed at Rs 2,568 on September 9 was trading at Rs 2,377 today, implying a decline of 7.43 per cent during the period. In comparison, Sensex tumbled 3.58 per cent in a month. RIL stock fell 1.18 per cent to Rs 2377 in noon trade against the previous close of Rs 2405.75 on BSE.

Shares of RIL stand lower than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. RIL stock has lost 10.07 per cent in one year and risen 0.67 per cent since the beginning of this year.

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Total 39.29 lakh shares of the firm changed hands amounting to a turnover of Rs 945.11 crore on BSE today. Market cap of the conglomerate fell to Rs 16.10 lakh crore. The share hit a 52-week high of Rs 2,855 on April 29, 2022 and a 52-week low of Rs 2,181 on March 8, 2022.

 In a move that can lead to recovery in the stock, the Mukesh Ambani-led conglomerate is likely to raise up to $1.5 billion via foreign loans. Its telecom arm Reliance Jio is also in talks with lenders to raise up to $2.5 billion through foreign loans, according to reports.

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Meanwhile, Morgan Stanley has an overweight stance on RIL stock with a target of Rs 3,085. The earnings upgrade cycle is taking shape with the new investment cycle, the US-based financial services company said in a note. The supply side challenges should keep the refining margins high, the firm said. Consumer retail is seeing good traction on store additions, the note added.

Pavitraa Shetty from Tips2trades said, "Weak global sentiment due to rising inflation across the globe due to the ongoing Russia-Ukraine conflict has led to a sharp downturn in all stocks including index heavyweight Reliance industries. Currently, Reliance Industries has a strong support at Rs 2,330 with immediate support at Rs 2,370 but needs to close above resistance of Rs 2,460 on daily charts to move up to targets of Rs 2,545- Rs 2620 in the near term."

Rajesh Sinha, Sr. Research Analyst at  Bonanza Portfolio said, "RIL has a strong balance sheet and we believe its traditional business will continue to generate steady cash flows and its consumer business will be the growth driver, going ahead. Recently, RIL announced to invest Rs 75,000 cr in its oil-to-chemical (O2C) business over the next five years to expand capacities in polyester & vinyl verticals and also set up the country's first carbon fibre plant at Hazira. We expect RIL's O2C segment's profitability to remain steady in the near-term. However, windfall taxes may cap some upside potential. We believe RIL's gross refining margins (GRMs) to stabilise in the near-to-medium term as RIL is investing into forward integration (petrochemicals business). Higher global LNG prices and ramp-up in gas production over FY23-24 may drive growth in RIL's oil & gas segment. We advise investors to remain invested or may consider any dip to enter for mid to long-term investment."

Tirthankar Das, Technical & Derivative Analyst, Retail, Ashika Stock Broking said, "Prices had been falling after facing resistance around the crucial supply zone of  Rs 2,650 generating from the downward sloping trendline since the start of the FY22. Amid the volatility, the stock has unfolded into a twin bearish structure, initially with a Head and Shoulder pattern which has a bearish implication as at the breach of neckline region of  Rs 2300- Rs 2275(coinciding with the 23.6% retracement of the rally since Mar’22) a deeper drop towards  Rs 1,800 (50% retracement) can be seen. Secondly, a bearish Wedge formation is also in place and prices has already plunged and initiated the necessary breakout against which the projected target of the stock comes around  Rs 2,065 followed by  Rs 1,835. Amid such pessimism, the level of  Rs 2050- Rs 2065 will be the key support level to watch for as it coincides with the 100WMA which reinstates that the stock is presently at a make-or-break level i.e. sustaining above which can lead to an intermittent pullback towards  Rs 2,650."