Reliance share price pulls back from one year low. Buy or wait?

According to stock market experts, this rise in Reliance share price today may turn out a mere pull back rally as Reliance share price chart pattern suggests that the stock may become bullish only above ₹2,350 apiece levels. However, for long term investors, CLSA has recommended strong worded ‘buy’ call as it believes that that Reliance shares may go up to 35 per cent from current levels in next 12 months.

On why Reliance share price has been falling in recent months, Santosh Meena, Head of Research at Swastika Investmart said, “Fundamentally, the retail and telecom businesses are showing sluggishness, which is putting pressure on the stock amid a rising interest rate environment. The selling by FIIs is another reason for the sharp fall in the stock.”

Advising positional investors to wait for more clarity, Sumeet Bagadia, Executive Director at Choice Broking said, “This rise in Reliance Industries shares may turn out a mere pull back rally from its last one year lows. Reliance shares chart pattern suggests that the stock may become bullish only above ₹2,350 apiece levels. Till then it is expected to remain ₹2,175 to ₹2,350 levels. So, one should wait for the breakout above ₹2,350 levels on closing basis and then only initiate fresh buying. For those, who have this stock in portfolio, they are advised to hold the stock with stop loss at ₹2,175 apiece levels.”

RIL share price target

However, CLSA believes that this is the time when long term positional investors should start buying and keep on accumulating on every dip as the stock may surge to the tune of 35 per cent in next 12 months.

Highlighting the fundamentals that may fuel Reliance share price rally, CLSA says, “We believe a lack of launches and growth areas has kept the stock subdued over the past 18 months. This could change in 2HFY24 as we expect the company to start offering its portable 5G device (Jio Airfiber) to ramp-up wireless broadband additions and launch its affordable 5G smartphone as it monetises its pan-India standalone 5G launch by end-2023. Recent brand launches (Independence, Campa Cola) suggest we could see visible strides in Reliance’s FMCG foray in 2023.”

On its suggestion to long term investors in regard to Reliance shares, CLSA said, “With three years having passed since the stake sale to PE investors, we see a good chance of a Jio and/or retail IPO in the next 12 months. Despite rising 5G capex, consolidated leverage should remain under control and well below 2x EBITDA. BUY for 35% upside to our TP.”

When CLSA released its report, Reliance share price was at ₹2,201.60 apiece levels and the brokerage has predicted 35 per cent upside from ₹2,206.10 levels.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.