Reliance Industries Ltd's (RIL) share price has underperformed benchmark indices Sensex and Nifty so far this year.
Reliance Industries Ltd (RIL) share price ended flat on Tuesday, even as domestic market benchmarks BSE Sensex and Nifty 50 settled in the red. RIL stock has underperformed the headline indices since the beginning of this calendar year, gaining only 5% against the 10-12% rallies in Sensex and Nifty. The stock failed to move higher after the much-awaited annual general meeting of the company, where RIL Chairman Mukesh Ambani announced a massive Rs 75,000 crore investment into the company’s new energy business. RIL stock ended at Rs 2087.20 apiece on Tuesday, up 0.06 per cent.
Check Live Price: Reliance Industries Ltd.
Reliance Industries Historical Price: RIL Share price in the last 10 trading sessions
In the last 10 trading sessions, Reliance Industries Ltd share price has slipped 7.05%. On June 15, the RIL share price was at Rs 2,250 per share. The major downward trend was seen in RIL shares last week ahead of its AGM. The stock sank 6% last week to end at Rs 2,104 apiece. However, after having corrected sharply, the stock seems to have reversed the trend. Most brokerage firms have a positive outlook on the oil-to-telecom conglomerate, anticipating upside potential as the company scales up businesses in retail, telecom, O2C, and now new energy space.
Massive Downside Potential?
Although most domestic and foreign brokerage firms expect Reliance Industries Ltd stock to perform well along with the underlying business. However, Macquarie Group has maintained an ‘Underperform’ rating on the stock since last May, recently reiterating its views. The foreign brokerage firm has a target price of Rs 1,350 apiece on RIL, translating to 35% downside from current levels.
In their recent report, Macquarie analysts have voiced concerns over RIL’s ability to sustain free cash flow generation over the last 15 years. “We have increased our capex outlook by 20% to ~$12bn/pa, ~50% above current consensus. On our forecasts, RIL remains FCF negative for the foreseeable future,” they added. Reliance Industries Ltd plans to invest a massive amount of Rs 75,000 crore ($10 billion) on capital expenditure.
Reliance Industries Ltd (RIL) History and Company Profile
Reliance Industries Ltd is a Fortune 500 company and the largest listed private corporation in the country. Reliance was started by Dhirubhai Ambani after returning to India in 1957 as a yarn trading business from a small 500 sq ft office. The company entered the stock market in 1977 launching its initial public offering (IPO), which was oversubscribed 7 times. Since the IPO, the company’s market capitalization has grown 32% CAGR.
Now, led by Asia’s richest man Mukesh Ambani, RIL is a conglomerate with businesses spanning from refining to telecommunications to retail and now plans to become a key player in the global new energy space. Reliance Industries’ telecom business under the Reliance Jio brand has 422 million wireless customers. Its retail business is growing rapidly and could soon become the country’s largest. RIL counts major global businesses such as Google, Facebook, and Saudi Aramco as its partners.