The heavyweight conglomerate company Reliance Industries is on one hand in an acquisition spree after making acquisitions in the clean energy space, it is also putting its bet on the textile segment and adding to its portfolio some of the reputed names.
There are also concerns around its valuations and considering it Japanese Nomura has reduced its rating from a 'Buy' to 'Neutral' amid delays in hike in tariffs as well as steep valuation. On the previous day, when the Sensex hit the record high of over 62000 points, hit a high of Rs. 2751.35 per share. In today's session, in early start, the stock has been swinging between gains and losses and last traded at Rs. 2729.55, down 0.1 percent, while at the close at tumbled by over 1 percent to Rs. 2700.4 apiece.
"While the outlook for each of its key operating businesses has been improving, and we view RIL's new energy forays positively, we believe that after the recent strong upward movement valuations are becoming expensive. We downgrade RIL to Neutral on our expectation of limited near-term upside," Anil Sharma and Aditya Bansal, analysts, Nomura said in a note on 18 October.
They believe that bulk of recent RIL stock outperformance is driven by investors' positive stance on new energy which attracts high environment social governance (ESG) investor interest. However, there is still limited clarity on RIL's new energy plans, overall capex, returns, Nomura said.
The stock's earnings are expected on October 22, 2021.