Reliance share price gains 19% YTD; time to buy more or book profits? Experts weigh in

Reliance share price has seen healthy gains this year, despite stock market volatility and fluctuating crude oil prices amid heightened global uncertainty.

Reliance shares ended 0.43 per cent lower at ₹1450.05 on the BSE on Tuesday, June 24, extending losses to the second consecutive session. 

At this price, the stock has jumped over 19 per cent year-to-date (YTD), outperforming the benchmark Sensex, which has gained 4.5 per cent this year so far.

On a monthly scale, Reliance share price has been on a winning streak since March this year, despite hitting a 52-week low of ₹1,115.55 on April 7 this year. It hit a 52-week high of ₹1,608.95 on July 8 last year.

Following the recent gains in the heavyweight stock, investors are weighing whether to stay invested or book profits.

Should you buy Reliance stock?

The company's healthy fundamentals and strong growth outlook support a long-term bullish view on the stock.

Despite recent gains, the stock's trailing-twelve-month (TTM) price-to-earnings (PE) ratio, at 28.6, remains below the industry median.

On the business fundamentals side, Reliance's refining and petrochemical businesses are highly sensitive to crude prices, as crude oil is their primary feedstock.

"When crude prices rise sharply, operational expenses increase, and if Reliance cannot fully pass these higher costs to end consumers, its profit margins come under pressure," Anubhav Sangal, Senior Research Analyst at Bonanza, pointed out.

Sangal added that Reliance's upstream oil and gas exploration operations can benefit directly from higher crude prices, as the value of produced oil increases. However, O2C (oil-to-chemicals) segment accounts for only one-third of Reliance Industries' consolidated EBITDA, which would not bring significant drag to the stock price.

Experts say that while the retail and telecom divisions of the company will drive its growth, Reliance's focus on the new energy segment will emerge as a significant growth engine of the company in the long term.

"We believe that with little downside to the stock, some upside is expected upwards of 5-8 per cent owing to strong traction in the retail business RIL’s growing telecom (Jio) and retail businesses provide some insulation from volatility in the O2C segment, helping stabilize overall earnings during periods of crude price spikes," said Sangal.

Sneha Poddar, VP—Research, Wealth Management, Motilal Oswal Financial Services, told Mint that RJio is likely to be Reliance's biggest growth driver, with a 21 per cent EBITDA CAGR over FY25-27 driven by one more tariff hike, market share gains in wireless, and ramp-up of the Homes and Enterprise business.

Additionally, with moderation in RJio's capex, Poddar believes the peak of capex is behind, which should lead to healthy free cash flow generation and a decline in consolidated net debt.

She expects continued growth recovery in Reliance Retail after the recent rationalisation of unprofitable stores and B2B, driven by category additions and its foray into quick commerce.

"Given these tailwinds, we have a positive fundamental outlook on the stock," said Poddar.

Recently, global brokerage firm Jefferies kept a buy call on the stock with a target price of ₹1,650. JP Morgan has an "overweight" rating on the stock with a target price of ₹1,568. Bernstein has an "outperform" view on the stock with a target price of ₹1,640.

Reliance stock: What do technical indicators suggest?

Technical experts point out that Reliance shares are hovering near their short-term EMA and are comfortably trading above all their key moving averages, which highlights the inherent strength in the trend and supports the case for continued upside in the medium to long term.

Hardik Matalia, Derivative Analyst at Choice Broking, underscored that Reliance stock is now hovering near the upper boundary of this consolidation range, suggesting that a potential breakout may be imminent.

Matalia believes that if the stock manages to sustain above the ₹1,475 level, it would confirm a breakout from the current range and could pave the way for further upside.

"The breakout, if decisive and backed by volume, may trigger a fresh rally toward ₹1,600–1,700, aligning with the stock’s ongoing bullish structure and overall positive undertone," said Matalia.

He highlighted that the Relative Strength Index (RSI) is currently placed around 63, and after consolidating, it is now showing signs of reversing higher. This supports the potential for a renewed bullish move, although traders are advised to wait for a clear confirmation via price action before initiating fresh positions.

"For short-term traders, a confirmed breakout above ₹1,475 could offer a trading opportunity with a favourable risk-reward ratio. It is advisable to enter only on strength, ideally supported by volume expansion, to avoid false breakouts. Long-term investors who are already holding the stock are advised to continue holding, as the overall structure remains bullish and the stock is well-positioned to benefit from further market strength," Matalia said.

"The overall outlook remains positive-to-bullish, with price action near the ₹1,475 resistance and ₹1,400 support levels likely to define the next directional move," Matalia said.

Dhirender Singh Bisht, AVP – Equity Technical Research at SMC Global Securities, observed a channel breakout on the daily chart.

Bisht pointed out that the stock had been consolidating in the range of ₹1,395–1,460 for the past six to eight weeks, and if it manages to sustain above the channel, a bullish move as per the channel breakout pattern could be expected.

"In the coming week, Reliance may test the target of ₹1,520 upon confirmation of the breakout,” said Bisht.

However, some experts say one can consider booking some profits in the stock as it is trading near a key resistance zone.

"At the current levels, it is advisable to consider profit booking within the ₹1,450– ₹1,470 range, as the stock is trading near a key resistance zone. This area has historically witnessed selling pressure, and a pause or pullback cannot be ruled out," said Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers.

"For those looking to initiate fresh long positions, a strong and sustained close above ₹1,470 is essential. Such a breakout would indicate renewed buying interest and could open the gates for a further rally toward the ₹1,550 mark in the near term. Until that breakout occurs, caution is warranted, and it would be prudent to wait for confirmation rather than entering prematurely," Patel said.

Read all market-related news here

Read more stories by Nishant Kumar

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.