RIL in bear grip as shares slide 7% since Q1. Can AGM be the next trigger point?
' (
RIL
) stronger-than-expected Q1 earnings and upbeat coverage from top brokerages have done little to lift investor sentiment, with the energy-to-retail giant's shares sliding nearly 7% since the results were announced last month. Market experts view the stock as being in a corrective or consolidation phase, suggesting the prevailing trend may persist.
The stock is likely to stay in the spotlight ahead of its
Annual General Meeting
(AGM) on August 29 — here's how investors can approach it.
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RIL's underperformance comes amid subdued Nifty on the back of Trump tariff concerns and overall weak April-June quarter earnings. The 50-stock index has shed 350 points or 1.4% as of Wednesday since July 18, when RIL declared its results.
Decoding RIL's weakness on the daily chart, Drumil Vithlani, Technical Research Analyst at Bonanza said that Reliance Industries shares are hovering near a key horizontal support zone of Rs 1,380 – Rs 1,375, which has been tested multiple times in recent sessions. "The RSI at 36.88 indicates the stock is in oversold territory, but no clear reversal signal has emerged yet," he said.
The Average Directional Index (ADX) is around 32 which suggests a moderate downtrend still in play, Vithlani said warning that a breakdown below Rs 1,375 on volume could accelerate selling pressure towards Rs 1,320 – Rs 1,300. Resistance lies at Rs 1,408 (20 EMA), followed by Rs 1,423 (50 EMA), this analyst said, adding that a sustained close above Rs 1,423 would be an early sign of reversal.
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Nilesh Jain, Head Vice President, Equity Research Technical and Derivatives at Centrum Broking sees Reliance stock under a consolidation. The short term structure is looking sideways to weak, however one can start accumulating Reliance as a positional bet, he said, placing the important support at Rs 1,325 and resistance at Rs 1,450.
RIL shares which ended Wednesday at Rs 1,384 are currently trading below its 50-day simple moving average (SMA). The stock has been quite volatile with Trendlyne data suggesting a 1-year beta of 1.2.
Also Read:
Vodafone Idea's 60% slump has more bearish undertones as analysts sound warning ahead of Q1 earnings
Brokerages gung-ho
Mukesh Ambani-led company had reported a 78% year-on-year increase in its Q1FY26 consolidated net profit to Rs 26,994 crore, compared to Rs 15,138 crore in the year-ago period. The sharp increase in profit was primarily driven by a one-time gain from the sale of the company's stake in Asian Paints, which contributed to Rs 8,924 crore in other income. The profit, attributable to the owners of the company, exceeded Street estimates of Rs 22,069 crore. The company's revenue from operations rose 5.3% to Rs 2,48,660 crore versus Rs 2,36,217 crore in the year ago period.
Also Read:
Reliance Industries Q1 Results: Cons PAT jumps 78% YoY to Rs 26,994 cr, beats Street estimates
Brokerages like Macquarie and Morgan Stanley reiterated 'Outperform' and 'Overweight' ratings on RIL counter while domestic ones like
Motilal Oswal Financial Services
(MOFSL) and Nuvama Institutional Equities have taken a 'Buy' view.
The targets suggested by them are Rs 1,500, Rs 1,617, Rs 1,700 and Rs 1,767, respectively. But these targets are long term and based on the fundamental reading of RIL by respective brokerages,
Macquarie in a post earnings note said that expected near-term moderation in the stock price.
Morgan Stanley flagged misses in retail and refining revenue but highlighted optimistic guidance, including a plan to double earnings by 2030.
While MOFSL remains optimistic about Jio's prospects, Nuvama sees Reliance's New Energy business as a long-term growth engine for its 'Buy' rating.
AGM in spotlight: 5 things to watch out for
Investors will be keeping an eye on the RIL commentary on the following things:
1) Doubling of overall business by 2030
Nuvama in a note said that the company's commentary on its target of overall business by 2030 will be watched. In its view, Jio Platforms and Reliance Retail Ventures (RRVL) will be key contributors.
Also Read:
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2) New energy business
This brokerage expects the New Energy (NE) business will likely replicate O2C earnings. NE ecosystem comprising polysilicon-to-modules, GH2 production, electrolyser and battery manufacturing; use of captive green power to slash cost by 25%.
3) Jio, retail IPO timelines
It argues this might trigger higher value, but is likely to be offset by holding company discounts for RIL investors.
4) Growth in retail post-reshuffle; updates on Jio Hotstar, FMCG expansion
Growth in its retail business remains crucial for investors while an update on Jio Hotstar monetisation and FMCG expansion is awaited.
5) Progress on massive petchem expansion
Petchem capacity expansion—polyester (5mtpa), vinyl (3.9mtpa), carbon fibre (20 ktpa)—by FY27 remains a key variable to monitor as RIL's focus now shifts to O2C, Nuvama said. RIL plans to drill additional wells by H2CY28E to enhance gas production and offset the natural decline at KG-D6 basin, the brokerage noted.
(
Disclaimer
: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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