scorecardresearchReliance Industries Chart Check: RIL stock rises 2%; should you buy it? 2 technicals analysts have this to say

Reliance Industries Chart Check: RIL stock rises 2%; should you buy it? 2 technicals analysts have this to say

Updated: 30 Sep 2022, 04:15 PM IST
TL;DR.
  • On September 20, global brokerage firm Jefferies revised its target price on Reliance Industries to 3,080 and maintained a buy call on the stock.
The fundamentals of the RIL stock look healthy.

The fundamentals of the RIL stock look healthy.

Shares of Reliance Industries (RIL) rose more than 3% in intraday trade on BSE on September 30 amid positive market sentiment. The stock ended 2.25% higher at 2,377.70 on BSE.

The stock has seen high volatility this year so far. On March 8, 2022, it hit its 52-week low of 2,181 and on April 29, 2022, it hit the 52-week high of 2,855. As of September 29, the stock is 19% down from its 52-week high level.

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RIL stocks in the last one year.

On the earnings front, the company missed analysts' estimates during the June quarter of the current financial year (Q1FY23).

As Mint reported, RIL posted a 46.3% growth in consolidated net profit to 17,955 crore in Q1FY23 compared to a profit of 12,273 crore in the same quarter last year. Q1 PAT climbed 10.8% from 16,203 crore in the preceding quarter (Q4FY22).

Consolidated revenue from operations rose to 2,23,113 crore, up 54.5% from 1,44,372 crore in Q1 last year, and recorded a single-digit growth of 5.3% from revenue of 2,11,887 crore in Q4FY22.

Strong fundamentals

On September 20, global brokerage firm Jefferies revised its target price on the stock to 3,080 and maintained a buy call on the stock.

Jefferies expects a 27% EBITDA CAGR in Jio over FY22-25E, helped by nearly 475m subscribers at 210 ARPU. Besides, it expects a 32% EBITDA CAGR in retail, a 12% EBITDA CAGR in refining and a 4% EBITDA CAGR in petchem over FY22-25E.

Besides, Jefferies said RIL's green hydrogen foray is part of its net carbon zero target by 2035.

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Interested in learning more about fundamental analysis? MintGenie is here to help! Click here.

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"Falling renewable costs and scale economics will lower green hydrogen costs. Given the capex intensity, RIL's strong balance sheet and backward integration put it in the driver's seat in the US$ 74bn opportunity. RIL's hydrogen business is worth US$ 8bn ( 100/share) at a 20% disc to European benchmark," said Jefferies.

The fundamentals of the stock look healthy. Let's take a look at what the technical charts are saying about the stock.

Technical views

Analyst: Jigar S. Patel, Sr. Manager - Equity Research, Anand Rathi Share and Stock Brokers

On August 24, 2022, daily scale, the counter tried to retest its previous top of 2,670 but it got rejected.

Over nearly the last two months, the stock has seen a 13% decline. At the current juncture, a bullish alternate bat has appeared with a potential reversal zone of 2,250-2,300 (Note: it is one of the most powerful patterns in the entire harmonic arsenal).

On the technical front, daily RSI has been in an oversold zone for the last one week so we can expect a bounce anytime on the counter. Last but not the least, MACD on a daily scale is overstretched which is also hinting toward the possibility of a bounce.

"Fresh buying in the counter is advisable between 2,260-2,280 with upside expected till 2,475 and plausible support is seen at 2,200," said Patel.

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Reliance Tech Chart

Analyst: Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher

The stock has broken the crucial support of 2,360 on the daily chart which it had maintained twice in the past.

Currently, with RSI also getting weak, the overall trend has turned bearish with downward targets open. The next support zones are near 2,230 and further 2,170 levels which was the previous major bottom made during March 2022.

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To learn more about technical and derivative analysis, click here.  

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From the current scenario, the trend can show improvement only after a decisive break above 2,360 levels and sustains for two-three sessions thereafter. We suggest keeping a cautious view now till further confirmation is established.

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RIL Tech Chart

According to a MintGenie poll, an average of 32 analysts have a ‘buy’ call on the stock.

Disclaimer: The views and recommendations given in this article are those of individual analysts and broking firms. These do not represent the views of MintGenie.

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First Published: 30 Sep 2022, 02:26 PM IST