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Reliance Industries shares face challenges but show potential for growth in retail and telecom sectors

In recent trading sessions, the Reliance Industries share price experienced a noticeable decline, reflecting broader market trends. Shares of Reliance Industries Ltd (RIL) dropped by 4% amidst a significant market crash. This decline brought the Reliance Industries shares down to ₹ 1285.35 from a previous close of ₹ 1339.10 on the Bombay Stock Exchange (BSE). The firm’s market capitalisation decreased to ₹ 17.40 lakh crore, highlighting the volatility in the stock market.

Trading Activity and Historical Performance

During this downturn, a total of 7.25 lakh shares of RIL changed hands, resulting in a substantial turnover of ₹ 94.46 crore on the BSE, marking it as the second-largest turnover of the day. The stock previously reached an all-time high of ₹ 1608.95 on July 8, 2024, before plummeting to a 52-week low of ₹ 1149.08 on November 10, 2023. Over the year, Reliance Industries shares have shown mixed performance; while they are down 0.30% year-to-date, they have gained 11.34% over the last twelve months.

Technical Analysis

Technical indicators provide further insights into Reliance Industries' share price trends. The Relative Strength Index (RSI) for RIL currently stands at 36.4, suggesting that the stock is trading within a neutral range neither oversold nor overbought. Additionally, RIL shares are trading below their 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling bearish sentiment in the short to medium-term. The stock also has a beta of 1.2, indicating higher volatility compared to the overall market.

Analyst Recommendations

Despite the recent downturn, JM Financial has retained a buy rating for RIL, emphasising potential recovery. Analysts noted that RIL’s stock has underperformed compared to broader markets, generating just 5% returns in the calendar year 2024 to date, versus a 15% return for the Nifty-50 index. The analysts believe that this trend could reverse, driven by several factors. They highlighted expectations of accelerated telecom tariff hikes, recovery in the retail segment, and positive developments in the new energy sector as potential catalysts for growth.

JM Financial expects good earnings growth in almost all segments and believes that PAT will grow at 15% CAGR between FY24 and FY27. But they also made certain that they gave us information about risks that may occur in the process. These are the following issues: sustained high levels of capital intensity, which are likely to lead to a rise in net debt, poor earnings visibility resulting from new projects, slow or weak subscriber growth, and finally strategy, downstream risks, and macroeconomic issues.

Growth Prospects in Key Segments

Similar sentiments of prosperous growth in the Reliance Industries were expressed by HDFC securities. It’s in their view that technical progress and the company’s projection to achieve top growth numbers in Reliance’s retail telecom, and new energy segments will surface as the chief growth drivers in the next two to three years. It wants to deliver at least twice EBITDA for the five years ahead, driven by 5G, higher spending on AI and data centres, and growth in the retail segment.

HDFC Securities has expected that Reliance Industries could deliver consolidated revenue growth at a CAGR of nearly 19% with EBITDA and PAT at a CAGR of 14% and 16% for FY24-26.

The Road Ahead for Reliance Industries Shares

The Reliance Industries share price analysis is far more than a basic narrative. The trading activity for the company, however, has lowered in the most recent period of comparison but analysts still expect growth in the future. Given the ongoing market environment, Reliance Industries is capable of timely gear up the pace by investing in more development sectors and bringing back into operation the business sectors that had been affected in the previous market condition. These dynamics will therefore be closely observed by investors with intent on understanding the movements of the Reliance Industries shares in the next few months.