It has been a dream run for investors in Reliance Industries Ltd (RIL) stock during the last three months. RIL share price has delivered more than 100% returns climbing to an all-time high of Rs 1,804 today compared to 52-week low of Rs 867 hit on March 23, 2020 on BSE.
Compared to the market heavyweight, Sensex has moved 36% from 25,880 on March 23 to intra day high of 35,213 today. The stock touched its yearly low on March 23 as Sensex and Nifty logged their biggest intra day fall in history in the same session. Sensex tumbled 3,934.72, or 13.15%, to end at 25,981.24 points. Nifty index settled 1,100.85 points, or 12.70%, lower at 7634.60.
However, RIL share saw value buying in the successive sessions in line with the benchmark indices. On April 17, share price of RIL rose over 5% intra day after the conglomerate raised Rs 8,500 crore from the sale of non-convertible debentures (NCDs). Shares of RIL opened with a gain of 4.39% and later touched an intraday high of Rs 1,229, rising 5.24% on BSE.
On April 22, share price of Reliance Industries rose up to 103 points or 8.33% to Rs 1339 against previous close of Rs 1,236 after Facebook announced buying minority stake in the Mukesh Ambani-owned telco Reliance Jio for $5.7 billion (Rs 43,574 crore).
Since April 22, Reliance Jio's digital arm Jio platforms has seen 11 investments in mere 9 weeks collecting Rs 115,693.95 crore from global tech investors. During the period, the stock has gained 46% from Rs 1,236 to Rs 1,804 on BSE.
RIL also garnered Rs 53,124.2 crore through rights issue with Mukesh Ambani-led conglomerate collecting a huge Rs 1,68,818 crore since April end.
The huge availability of funds helped RIL to become net debt-free last week which propelled the stock to cross the Rs 1,800 mark, its highest ever level today.
However, the stock saw minor profit booking today and closed 0.70% lower at Rs 1,747 against previous close of Rs 1759 on BSE. The stock hit its all-time high of Rs 1,804 intra day, rising 2.53% today.
After hitting historic high, is there more steam left in the stock? Here's what analysts told Business Today.
Abhijeet Ramachandran, independent analyst and co-founder and trainer at Tips2trade said, "With deals almost on a weekly basis to almost becoming a net zero debt company and with renewed focus on the attractive Indian retail and telecom business, Reliance is on its way to have a mega uptrend in the coming year. However, current prices are very overbought and a dip till Rs 1,580-1,600 can be used to re-enter this stock with targets of Rs 2050 and even Rs 2275 by the end of this financial year."
Jyoti Roy, DVP Equity Strategist at Angel Broking said, "We are positive on Reliance Industries from a long term perspective as we believe that the digital and retail business will be key growth drivers for the company going forward and their listing over the next 3-5 years would lead to significant value unlocking for the shareholders. We expect the hydrocarbon business to recover in the second half of the year as demand for petroleum products normalises. Refining and petrochemical margins which are currently depressed due to lower demand should improve in the second half of the year. Given no significant capex outlay in the near future, the hydrocarbon segment should generate free cash flows which can be used to fund expansion in other businesses.
We are positive on the long term fundamentals of the company and have a buy rating with a target price of Rs 1,937. While we remain positive on Reliance Industries from a long term perspective, we believe that there could be some short term volatility given that the stock has run up by more than 100% from its March lows. We would recommend investors to use any short-term volatility to buy into the stock from a long-term perspective."
Deepak Jasani, Head retail research at HDFC Securities said,"Reliance has met our target of Rs 1801 on June 22 and hence we feel from here, the upside could be limited. A series of stake sale in its subsidiary Jio Platforms to marquee investors has resulted in it becoming net debt free ahead of promised deadline. This has led to a lot of delivery buying in the stock. Reliance's contribution to Nifty's run since the low of 7511 is hugely disproportionate and we could see some sort of mean reversion sooner or later."