Reliance Infra Shares Surge 14%: Potential Revisit to One-Year High Level?

Reliance Infrastructure recorded a widened consolidated net loss of Rs 421.17 crore in the December quarter (Q3 FY24), compared to Rs 267.46 crore in the same period last year. This increase in loss was primarily due to higher expenses incurred by the company during the quarter.

The 14-day relative strength index (RSI) for the company’s stock stands at 59.31. Typically, a level below 30 is considered oversold, while a value above 70 indicates the stock is overbought. Reliance Infra’s stock currently has a negative price-to-equity (P/E) ratio of 2.29 and a price-to-book (P/B) value of 1.10.

Reliance Infrastructure Ltd shares surged 13.62% on Wednesday, reaching a day high of Rs 239. Despite trading 3.75% lower than its one-year high of Rs 248.30, observed earlier this year, the stock has rallied significantly, posting multibagger returns of 108.55% from its 52-week low of Rs 114.60, recorded on February 23 last year.

In the December quarter of fiscal year 2023-24, Reliance Infrastructure Ltd witnessed a widened consolidated net loss of Rs 421.17 crore compared to Rs 267.46 crore in the year-ago period, primarily due to increased expenses. However, the company’s total income saw a rise to Rs 4,717.09 crore from Rs 4,224.64 crore in the corresponding period of the previous fiscal. Despite this increase in income, expenses surged to Rs 5,068.71 crore in Q3 FY24 from Rs 4,840.87 crore in the third quarter of the previous fiscal year.

Technical analysts suggest that Reliance Infrastructure Ltd’s stock may find support at Rs 224, followed by Rs 214, Rs 200, and Rs 190 levels. However, a significant breakthrough above its one-year high level of Rs 248 is deemed necessary to indicate a potential further upside in the stock price.

According to Osho Krishan, Senior Research Analyst – Technical & Derivatives at Angel One, Reliance Infrastructure Ltd’s stock has been exhibiting a bullish trend, marked by successive higher highs and higher lows for over a year. The stock is currently approaching its previous high of Rs 248, and a clear breakthrough beyond this level could signal the start of the next upward movement towards Rs 260-270 in the near term. On the downside, Rs 200 is expected to provide support, with further significant support at Rs 190 during the comparable period.

According to Jigar S Patel, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers, the support level for Reliance Infrastructure Ltd’s stock is expected to be at Rs 220, while resistance is seen at Rs 240. A clear and decisive close above the Rs 240 level could potentially lead to further upward movement, with a target price of Rs 255.

According to AR Ramachandran from Tips2trades, the Reliance Infra stock price appears bullish on daily charts, with robust support at Rs 214. A daily close above the resistance level of Rs 246 could potentially drive the stock towards a target of Rs 278 in the near term.

Meanwhile, DRS Finvest founder Ravi Singh suggests that the stock is displaying strength on daily charts and may reach Rs 245 in the near term. He advises keeping a stop loss placed at Rs 224 to manage risk.

Reliance Infrastructure’s stock has a 14-day relative strength index (RSI) of 59.31, suggesting it is neither oversold nor overbought. An RSI below 30 indicates oversold conditions, while above 70 suggests overbought conditions.

The company’s stock has a negative price-to-equity (P/E) ratio of 2.29, indicating that its earnings are negative. However, its price-to-book (P/B) value stands at 1.10, suggesting the stock may be undervalued relative to its book value.

With a one-year beta of 0.6, Reliance Infra exhibits low volatility compared to the market.

The company operates in the engineering and construction services sector, with a focus on power, roads, metro rail, and other infrastructure projects.

Read more Business News