Should you buy, sell or hold RIL shares post Q3?

Shares of Reliance Industries (RIL) witnessed choppy trade on Saturday, as the market opened for a full session, a day after the oil-to-telecom conglomerate released its earnings for the second quarter ended December 31, 2023. 

RIL shares opened lower at 2729.95 against the previous closing price of ₹2,735.05 on the BSE. Extending opening losses, the country’s most valued stock declined as much as 1.3% to ₹2,698.60, but it soon made a smart recovery. The stock rebounded 2.1% from day’s low to hit a high of ₹2,756.45 in the first two hours of trade so far.

At 10:45 AM, RIL shares were trading at ₹2,745.05, up 0.37%, with a market capitalisation of ₹18.59 lakh crore.  The bluechip stock touched its 52-week high of ₹2,792.65 on January 15, 2024, gaining nearly 39% from its 52-week low of ₹2,012.14 touched on March 20, 2023.

Reliance has broken out of a multi-month consolidation pattern with a bullish flag formation near its 20-day moving average (DMA), says Santosh Meena, Head of Research, Swastika Investmart Ltd. “This technical setup suggests the potential for further upside towards the 2,900 level. However, option data hints at some resistance near the 2,800 strike price, as call writers seem confident at that level. Therefore, a decisive break above 2,800 would be needed to overwhelm these call writers and fuel further gains. On the downside, the 20-DMA at 2,650 acts as a strong support level.”

Should you buy, sell, or hold RIL shares post Q3?

The billionaire Mukesh Ambani-led company posted 10.9% growth in net profit at ₹19,641 crore for the December quarter as compared with ₹17,706 crore in the same quarter a year ago. Gross revenue for the quarter rose 3.2% to ₹2,48,160 crore as against ₹2,40,532 crore in the year-ago period. EBITDA grew 16.7% YoY to ₹44,678 crore, while margin stood at 18%, up 210 basis points YoY.

Most analysts have maintained a bullish stand on the Reliance Industries shares after the December quarter results.

Post Q3, foreign brokerage Morgan Stanley has given an ‘overweight’ call on the stock with a target price of ₹2,821 per share.

CLSA has assigned a ‘buy’ rating on RIL with a target price of ₹3,060 per share, saying that EBITDA/EBIT was in line. The brokerage in its report highlights that there is an indication of operating leverage as Retail EBITDA per square foot rose for the second consecutive quarter, while subscriber growth in telecom business from wireless broadband would be a significant and unexpected development.

Meanwhile, Emkay Global has given an ‘add’ call on the RIL shares with an upgraded target price of ₹2,950 per share, an increase of 8% from the earlier estimates. The brokerage house has maintained its FY24-26 earnings estimates, citing improvement in new energy value and a higher Jio EV/EBITDA target.

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