Reliance Industries Share Price Analysis – Reliance Industries Limited (RIL) continues to command attention as one of India's largest conglomerates, with a market capitalization of ₹17,04,267 crore. The stock is currently trading at ₹1,259, reflecting a decline from its 52-week high of ₹1,609, and is moving closer to its 52-week low of ₹1,168. The bearish momentum in the stock highlights challenges in the short term, though the company's fundamentals remain strong.
Reliance Industries share price has shown consistent downward pressure, with its stock closing at ₹1,260.35, reflecting a 0.57% decline on the daily chart. The chart indicates bearish momentum, with prices trading well below key moving averages, signaling weakness in the near term.
The stock is below its 20-day, 50-day, 100-day, and 200-day moving averages, which are positioned at ₹1,315.05, ₹1,348.29, ₹1,386.40, and ₹1,454.47, respectively.
These levels now act as significant resistance points, suggesting that any upward recovery may face challenges.
The stock has maintained a consistent downtrend since early September, with lower highs and lower lows, highlighting a bearish structure.
The breach of ₹1,300, a psychological support level, indicates increasing selling pressure.
Immediate support is visible around ₹1,240, which represents a key level where the stock may consolidate before attempting a reversal.
Resistance is prominent at ₹1,300 and ₹1,315. Breaking above these levels is crucial for a trend reversal.
Trading volumes have shown spikes during recent declines, indicating stronger selling pressure. Lower volume during any recovery attempts suggests weaker buyer confidence.
The RSI (Relative Strength Index) likely signals oversold conditions, suggesting a potential technical rebound in the short term. However, any recovery must be supported by strong buying interest to sustain.
The moving average convergence divergence (MACD) (from the observed trend) appears to confirm bearish momentum, with no immediate signs of reversal.
Revenue (TTM): ₹924,938 crore
Net Profit (TTM): ₹77,652 crore
Operating Profit Margin (OPM): 17%
Return on Equity (ROE): 9.25%
While the company has maintained stable revenue growth, the low ROE of 9.25% reflects challenges in generating shareholder returns.
The company has a dividend yield of 0.39%, which is relatively low compared to its peers. However, its dividend payout ratio of 10% aligns with its focus on reinvestment and growth.
Reliance Industries has successfully reduced its debt, a significant positive for long-term investors. This strategic move enhances its balance sheet and positions the company for future growth.
Peer Comparison
| Company | CMP (₹) | P/E | Market Cap (₹ Cr.) | Dividend Yield (%) | ROCE (%) |
| Reliance Industries | 1,259 | 25.05 | 17,04,267 | 0.39 | 9.61 |
| Indian Oil Corporation | 134 | 11.06 | 1,89,013 | 8.98 | 21.14 |
| Bharat Petroleum | 289 | 9.45 | 1,25,535 | 7.19 | 32.09 |
| Hindustan Petroleum | 368 | 18.62 | 78,229 | 5.78 | 21.26 |
| Mangalore Refinery | 148 | 28.40 | 25,912 | 2.06 | 25.75 |
Reliance Industries has the highest market capitalization among its peers but trades at a relatively high P/E ratio of 25.05, reflecting premium valuations. In comparison, companies like Bharat Petroleum and Indian Oil Corporation offer higher returns on capital and dividend yields.
In Q2 FY24, Reliance Industries reported:
Revenue: ₹231,535 crore (flat growth of -0.15% YoY)
Net Profit: ₹19,323 crore (-4.78% YoY)
Operating Profit Margin: Stable at 17%
The company's revenue remained steady, but net profit declined due to increased expenses and interest costs. The reduction in profit underscores the impact of higher input costs and weaker margins in specific segments.
Oil-to-Chemicals (O2C): The largest contributor to revenue but impacted by fluctuating crude prices.
Retail: Continued to deliver growth, driven by robust demand across categories.
Telecom (Jio): Strong subscriber base growth and ARPU improvement supported profitability.
Key Strengths
Debt Reduction: Reliance Industries has significantly reduced its debt, improving its financial stability.
Diverse Business Model: The company's presence across multiple sectors, including O2C, telecom, and retail, provides resilience against market volatility.
Strong Market Leadership: Reliance remains a leader in the energy and telecom sectors, ensuring long-term dominance.
Key Challenges
Low Return on Equity (ROE): The ROE of 9.25% is below expectations, reflecting inefficiencies in capital utilization.
Macro-Economic Risks: Volatility in crude prices and global economic conditions can impact its O2C business.
Regulatory Challenges: As a major player in multiple industries, the company is exposed to regulatory changes, which could affect profitability.
The stock is likely to remain under pressure in the near term, given the technical indicators and bearish momentum. Any recovery will depend on breaking the resistance at ₹1,300. Investors should closely watch the ₹1,240 support level, as a breach could trigger further declines.
Reliance's focus on debt reduction and investments in growth sectors like green energy and digital services positions it well for long-term value creation. Its diversification across high-growth segments provides a cushion against sector-specific risks.
Reliance Industries is at a critical juncture, facing short-term challenges but retaining strong fundamentals. The stock's current bearish trend reflects market concerns over profitability and macroeconomic conditions. However, the company's leadership, diverse business portfolio, and financial prudence make it a compelling long-term investment option.
Investors should approach cautiously in the short term, keeping an eye on support and resistance levels while monitoring quarterly results for signs of recovery. In the long term, Reliance Industries remains well-positioned to deliver sustained growth and value creation.