Foreign brokerage Bernstein has maintained an 'Outperform' rating on Reliance Industries Ltd (RIL), with a revised target price of Rs 3,000 from Rs 3,040 earlier, factoring in the demerger of Jio Financial Services (JFS). The new target price for the counter suggests an upside potential of 19 percent from the current market levels.

Share Market Live

NSE

The brokerage said that Reliance is on the path of unlocking across business segments, evident from the recent demerger of Jio Financial Services (JFS), buyout of minorities investor in Reliance Retail and the stabilising of telecom capex.

"Reliance has been unlocking value across segments. RIL bought out minority shareholders in Reliance Retail with a share buyback. Recent news article reported that a new investor is expected to buy 1 per cent stake in Reliance Retail at $100 billion valuation. RRVL(hold co) had sold stake sales of 10 per cent to financial investors in 2020. JPL (Jio platforms) has 33 percent global investors and could be on IPO route in short/medium term," it said in a research note.

Bernstein said that Jio Platforms has 33 percent global investors and Reliance Retail has 10 percent investors. The company has not diluted stake in the new energy segment, the brokerage said.

Bernstein also said that Reliance has repositioned the company to focus on four key growth pillars. RIL is expanding its oil-to-chemical (O2C) business into downstream chemicals with investments by strategic partners. It is building up Reliance Retail (18,000 stores) and scaling omnichannel (e-commerce mix at 18 percent). The oil-to-telecom major is expanding Jio Platforms (currently 45 crore subscribers ) with 5G rollout.

Besides, RIL continues to scale up in new energy by accelerating investments in energy transition, the brokerage noted.

Key triggers for RIL stock

After making an all-time high, shares of Reliance are trading in a range at a higher level forming Rectangle Pattern on the daily chart.

"Currently, Rectangle has respected the resistance zone and a small retracement is been witnessed, which can be continued towards 2280 levels. Long-Term EMA (200) has been respected multiple times, suggesting that Reliance can take the support of the EMA (exponential moving average). The EMA is still showing an upward trend to continue in the coming days," said Ashish Katwa, Technical Research Analyst at Bonanza Portfolio.

Volume during the buying has been significant compared to selling, indicating that buyers are keener to buy Reliance on a dip, Katwa said.

Based on above technical structure, the analyst recommends a 'buy on dip' strategy in the counter at around 2280 or a fall in the price till 2240 levels, that can be used as buying opportunity for the upside target of 3000.

"After the demerger of Jio, the financial stock is under pressure. Alongside the government has announced hike in Special Additional Excise Duty (SAED) also," said Ravi Singhal-CEO, GCL Broking.

On RIL shares, Singhal said, "The stock price is almost 10 percent down from its recent high. But it has strong support near 2370 to 2400 levels. So buying on dips is advisable near 2420 with a stop loss at 2369."