RIL stock could take a breather as D-Street digests Q1 results
Reliance Industries, India's most valuable company, may decline on Monday after the company's June quarter results fell below the estimates of a section of the market. The perceived earnings miss, which has come on the heels of the 31% record-breaking surge in the stock price from its 2023 lows in March, could dampen investor sentiment in the absence of near-term positive triggers, said analysts.
There could be a 5-7% drop in the stock in the short term, said Hemang Jani, a Mumbai-based market expert. Reliance Industries (RIL) ' global depositary receipts (GDR) listed in London declined 5.9% on Friday evening after the oil-to-telecom conglomerate announced its results after Mumbai trading hours.
RIL shares fell 3.2% on Friday in weak trading to ₹2,536.20 ahead of the results, a day after they closed at an all-time high following the demerger of Jio Financial Services, the group's financial services business.On a Tear «The likelihood of a negative reaction in the market to the June quarter results must be seen more from the point of view that the stock had run up quite a bit in the past three months because of the (Jio Financial) demerger,» said Jani. «While the oil to chemicals business seems to be under pressure, the retail and telecom businesses are shaping up quite well.» RIL posted an 11% drop in consolidated net profit for the quarter ended June 2023, compared to the same period a year ago, to ₹16,011 crore.
Net profit was expected at ₹16,995.50 crore, according to analysts' estimates compiled by Bloomberg. Brokerage Emkay Global downgraded RIL to 'hold' after the first quarter earnings citing the recent stock run-up and rangebound business outlook.
It has a price target of ₹2,660. RIL shares rose from ₹2,012
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