The stock has gained nearly 13 per cent since the end of July, staying under the radar, all the while. Much of those gains have been backed by investors who are anticipating further gains in the stock as reflected in the delivery volume data of the stock.
Average delivery volumes on the stock during the 13 per cent gains were at 50.4 per cent, which is substantially higher than the 40 per cent average delivery volumes in the previous seven months.
At the fundamental level, the gains are being driven by rotation of funds towards largecap underperformers in August, as the broader market started to face selling pressure from retail investors. Further, a swift re-opening of the economy since June has brightened the outlook for the retail and energy businesses of the conglomerate.
RIL’s retail and refinery operations were among the biggest casualties during the June quarter, which was marred by the second wave of the pandemic. With retail brick-and-mortar stores now reopening, there is hope among analysts that footfalls would start recovering in September and December quarters.
On the telecom front, investors are steadily factoring in the possibility of more market share gains if
heads towards bankruptcy as is feared. In addition to that, there is excitement on the potential impact of the new JioPhone smartphone that Jio Platforms will launch in collaboration with Google.
The phone will be launched on September 10 across the country. Brokerage firm Motilal Oswal Financial Services believes it could help bolster Reliance Jio’s monthly subscriber addition run rate to around 7 million per month.
That said, RIL’s stock has seen such false starts multiple times ever since the stock hit its record high in September 2020. The stock has virtually been a non-performer in the Nifty50’s rise from around 11,200 points in September 2020 to 17,200 currently.
During that period, RIL has seen its weight in the Nifty50 index being shaved off to 10 per cent from as high as 15 per cent as information technology stocks ran with the baton of the bull market that RIL had carried between April and September 2020.
Some analysts believe this time could be different for the RIL stock.
Technical analysts believe the current breakout in the shares of Reliance Industries that may have started when the stock broke above the Rs 2,150 level has a lot of leg room. Sacchidanand Uttekar of Tradebulls Securities expects the stock to hit Rs. 2,440-2,460 level by the end of the month.
“It is one of my top picks for the month. We will continue to see a sustained, steady rise in the stock going ahead. I won’t be surprised if it inches towards Rs 2,500 level,” Uttekar said.