Reliance Infrastructure stock rally: Shares of Anil Ambani-led company see 101% returns in 12 months; what's driving the move?
Reliance Infrastructure share price: Anil Ambani-led Reliance Infrastructure's stock has surged impressively by 101% in the last 12 months, driven by significant debt reduction, a substantial three-level improvement in credit rating, and positive developments in the infrastructure industry.
The stock currently trades near a critical resistance level, with technical experts suggesting potential upside to Rs 500, contingent on sustained momentum and positive catalysts, according to an ET report. As the company prepares for a significant board meeting this week focusing on capital raising, investors are evaluating whether the current rally can maintain its run.
Is Reliance Infrastructure share price rally sustainable?
According to the ET report, market observers highlight positive technical indicators and strengthening business metrics, whilst cautioning about increased market fluctuations and key resistance points that could influence investor sentiment in the immediate future.
The share price maintains positive returns of 4.7% weekly, 53.3% quarterly, 42% half-yearly, and 22.5% since the year began.
Technical analysis shows the stock maintaining positions above all significant simple moving averages, spanning from 5-day to 200-day periods, indicating positive trends across various timeframes.
The RSI measurement of 57.3 suggests balanced market conditions, whilst the MACD indicator remains positive despite being under the signal line.
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According to Ajit Mishra, SVP Research at Religare Broking, Reliance Infrastructure demonstrates robust positive movement, maintaining levels above crucial moving averages without showing signs of weakness. He noted that "elevated volumes on up-days suggest sustained buying interest and healthy participation."
The stock's immediate support lies between Rs 365-380, with resistance near Rs 400, Mishra was quoted as saying.
He suggests that crossing above Rs 400 could trigger a movement towards Rs 420-425. His advice to short-term traders is to await either a confirmed breakthrough or a substantial retreat to support levels.
INVasset PMS's Fund Manager and Partner, Anirudh Garg, anticipates more significant price movements. "On the upside, Rs 415–Rs 420 is an immediate resistance zone—the stock attempted to break out here recently but saw rejection, marking it as a short-term ceiling.
Sustained move above Rs 420 could open gates toward Rs 500," he was quoted as saying.
Regarding downside risks, Garg noted, "on the downside, Rs 325–Rs 340 serves as strong support, aligned with previous breakout levels and volume clusters. A breach below that could trigger deeper retracement. The broader range remains Rs 340–Rs 420 unless either side is taken out with strong volume."
Credit Rating Enhancement and Financial Recovery
India Ratings & Research elevated Reliance Infrastructure's credit standing from 'IND D' to 'IND B/Stable/IND A4' last week, signalling a substantial improvement in investor confidence.
This three-level advancement ended the company's six-year period in the default category.
The official exchange filing said, "This upgrade represents a significant improvement of three notches in the Company's credit profile, achieved after six years at the IND D rating level. The upgrade also reflects the Company's substantial deleveraging efforts, resulting in net zero debt with banks and financial institutions."
Garg described the rating improvement as a "major fundamental shift," attributing it to the company's virtually debt-free standalone position and enhanced debt servicing capabilities.
Reliance Infra achieved a legal victory earlier this year when NCLAT halted insolvency proceedings initiated by IDBI Trusteeship Services. The tribunal accepted evidence of complete repayment of Rs 92.68 crore to Dhursar Solar Power Pvt Ltd, resolving a significant legal challenge.
The organisation's strategic expansion includes securing a Rs 5,000 crore defence contract for comprehensive aircraft upgrades, establishing itself as India's first private enterprise to independently manage such an initiative. The implementation period is projected to be 7-10 years.
The company's Q4 FY25 performance bolstered market confidence. Reliance Infrastructure eliminated standalone bank debt following a Rs 3,300 crore reduction during the period. The consolidated profits reached Rs 4,387 crore, recovering from a Rs 3,298 crore deficit in the previous quarter. Adjusted EBITDA increased by 681% to Rs 8,876 crore, whilst net worth grew 44% quarter-on-quarter to Rs 14,287 crore by March 31, 2025.
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