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Business News/ Markets / Stock Markets/  RIL shares surge 14% in a month. Key factors driving the stock rally
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RIL shares surge 14% in a month. Key factors driving the stock rally

RIL share price is nearing its all-time high level of ₹2,750 and is about 5% away from the said level

A man walks past a Reliance Industries Limited sign board installed on a road divider in Gandhinagar. File Photo (REUTERS)Premium
A man walks past a Reliance Industries Limited sign board installed on a road divider in Gandhinagar. File Photo (REUTERS)

Shares of Reliance Industries (RIL) have surged over 14% in a month as compared to a 3% rise in benchmark Sensex. The stock is nearing its all-time high level of 2,750 and is about 5% away from the level. The index heavyweight has been surging on the back of rise in Singapore gross refining margin (GRM), as per analysts.

“Reliance Industries is firing on all cylinders because its petchem business is doing extremely well on the back of a surge in Oil and Gas prices where Singapore GRM is at an all-time high. Its telecom business is unaffected by geopolitical tension and inflation whereas it is exploring synergies in its retail business. It is continuously expanding its path in the renewable energy business that opening more opportunities for the company," said Santosh Meena, Head of Research, Swastika Investmart Ltd. 

Technically, the stock has created a strong base at the 2250 mark then witnessed a smart rally where it has broken out falling channel formation which is leading to fresh bullish momentum. On the upside, 2700-2750 is an immediate resistance area while it has the potential to move towards the 3000 mark. On the downside, 2500 should act as an immediate and strong support level, Meena added.

Reliance Retail Ventures Ltd (RRVL) recently acquired an 89% stake for 950 crore in Purple Panda Fashions Pvt. Ltd, which owns women innerwear and lounge wear brand Clovia.

"After the recent surge in crude oil prices, petro-chemical business of the RIL is expected to get margin benefit on its unsold petrol and diesel inventories. Apart from this, it has recently acquired majority stake in Clovia, that may push Reliance Retail business volume in the upcoming quarters. There are speculations on potential rise in Average Revenue Per User (ARPU), which also acts as a good news for RIL shares," said Ravi Singhal of GCL Securities.

Abdul Karim, a research analyst at HDFC Securities, said: “Reliance Industries is one of India's largest private sector companies, with diverse interests, including telecom, petrochemicals, oil refining, and upstream oil and gas exploration and production company, stock moved up sharply over the last three weeks, and it is near to all time high of 2,750. The stock has been surging on the back of rise in Singapore GRM and higher oil and gas prices also supporting petchem business. After the recent surge in crude oil prices, its petro-chemical business is likely to report margin benefit on its unsold petrol and diesel inventories."

“On retail business, Reliance’s take over deal of Future Retail stores has been concluded amid dispute with Amazon and Reliance to to take over operation of 200 Future Retail stores. Reliance Tariff hike for unlimited prepaid plans, was effected from Dec 01, 2021 could help to increase its Average Revenue Per User (ARPU) going forward. Recent acquisition of 89% stake in lingerie retailer Clovia also boosted the investor’s sentiment."

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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Published: 25 Mar 2022, 11:41 AM IST
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