Reliance Industries shares hit new 52-week low, down 14% so far this year; analysts see more downside

Weakness in shares of Reliance Industries continued as the counter declined for the sixth consecutive session in Thursday's trade to hit its fresh one-year low level. The stock fell 1.55 per cent to touch a day low of Rs 2,202.30 over a previous close of Rs 2,236.85. A total of 1.53 lakh shares changed hands today on BSE, which was lower than the two-week average volume of 2.61 lakh shares. Turnover on the counter stood at Rs 34.11 crore, commanding a market capitalisation (m-cap) of Rs 15,18,006.49 crore. At today's day low of Rs 2,202.30, the counter has declined 14.48 per cent in the year so far.

Support on the counter could be seen at Rs 2,180, an analyst said, while another suggested that a further downside of 6-7 per cent could be possible on the counter.

"Reliance Industries shares at lower levels are definitely a buy as there's no problem with the stock. Another 6-7 per cent correction may happen which can be a good opportunity for long-time buyers to enter. Reliance will bounce back in the long run," said AK Prabhakar, Head of Research, IDBI Capital Markets.

"RIL looks bearish but oversold on the daily charts with the next crucial support at Rs 2,180. A close below this support could lead to Rs 2,135. Strong resistance will be at Rs 2,304," said Pavitraa Shetty from Tips2trades.

"The stock is in a bearish zone indicated by major momentum indicators on the daily charts. The RSI (Relative strength index) is also signalling a negative trend to continue ahead. The current scenario in the counter may further push Reliance towards lower levels of Rs 2,150 in the near term," said Ravi Singh, Vice-President and Head of Research at Share India.

At the current market price, fresh longs are not recommended as we are expecting Reliance to test Rs 2,200 levels in coming sessions, said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

That said, Kotak Institutional Equities has assigned a 'Buy' rating for Reliance while pegging it at a fair value of Rs 3,000 over the next 12 months.

The scrip has an average target price of Rs 2,896, Trendlyne data showed, suggesting a potential upside of 29.59 per cent. It has a one-year beta of 1.10, indicating high volatility on the counter.

The stock was last seen trading lower than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 33.34. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 36.49.

In a separate development, the Competition Commission of India (CCI) has cleared Reliance's Rs 2,850 crore acquisition of German retailer Metro AG's wholesale operations in India.

Reliance Retail, a subsidiary of the oil-to-telecom conglomerate, signed definitive agreements to acquire a 100 per cent equity stake in Metro Cash & Carry India to strengthen its dominant position in India's retail sector.

Meanwhile, Indian equity indices recovered from early losses and turned positive in late-morning deals, helped by gains in consumer, pharma and energy stocks.

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