In comparison to the Reliance Industries' record high of Rs. 1978.5 hit just ahead of the company's 43rd AGM, the stock just after and in fact on the same day tanked by a huge percentage. This was primarily on account of profit booking in the stock of RIL after the announcements in the AGM, wherein the conglomerate company did not provided any timeline for the listing of its Jio Platforms.
Also, the company cleared due to the Covid 19 pandemic the Saudi Aramco deal could not progress as per timeline.
Reason For Sharp Decline In Stock Price Of RIL Post 43rd AGM
"One of the key reasons for the stock to correct post the AGM was the management's commentary that the Saudi Aramco deal has not progressed as per expectations and that the company will spin off their O2C business into a separate subsidiary," said Jyoti Roy, DVP- Equity Strategist, Angel Broking Ltd.
Also, no concrete decision on the listing of the Jio Platforms with regard to the timeline was not taken well by the street.
Nonetheless the positive aspect was the stake sale of over 7% in Jio Platforms to Google.
IDBI Capital Revises Rating On RIL To 'Buy' From 'Hold' And Eyes 17% Upside From LCP
As per the brokerage and research firm, 5 of the accelerators that would fuel the rally in the stock price from here:
(i) Mobile broadband
(ii) JioFiber-Gigabit speed Home Broadband service
(iii) Enterprise broadband in combination with cloud solution
(iv) Broadband for SME
(v) Narrowband Internet of Things (NBIoT) services, has huge potential to significantly increase its contribution to RIL's overall EBITDA contribution. "We believe collaboration with Google and other marquee names would make a strong case for re-rating of its Jio business valuations," it said.
Axis Capital Also Gave Buy call with a Target Price of Rs. 2130
Axis Capital has also recommended to 'buy' RIL stock with a target price of Rs 2,130 apiece, an upside of 15.38 per cent. "Total capital raise of Rs 2.13 lakh crore through rights issue, strategic/ financial investments in Jio and BP investment helped the company surpass zero net-debt target on a reported debt basis," it said.
On fresh dips, position in RIL stock can still be taken
Now the company has completed its capital raising spree for its digital arm and now will only look for strategic partners. Brokerage firm Religare Broking remains positive on the company's long term growth plans, advising to hold the RIL stock. "On the financial side, it has a healthy balance sheet, net debt-free status, strong management and promising growth prospects across businesses. Fresh investment in RIL to be made only on dips," it said.