Wedoany.com Report on Mar 13th, The stock price of Indian conglomerate Reliance Industries has fallen by approximately 11% this year, erasing nearly 3 trillion rupees in market value, with its current market capitalization around 19 trillion rupees. Analysts point out that this performance stems from weak refining margins, high capital expenditure, and the new energy business transformation period not yet contributing to profits.
Ravi Singh, Chief Research Officer at Master Capital Services, said: "Reliance Industries' underperformance is mainly due to weak refining and petrochemical margins, while the company continues to heavily invest in new energy projects." He added that the monetization process of Jio's 5G network is slower than expected.
Reliance Industries' business spans refining, petrochemicals, telecommunications, retail, and new energy, and its diversified structure once supported growth. However, analysts believe that its massive market capitalization makes incremental developments difficult to significantly impact the stock price. Paresh Bhagat, Chief Investment Officer at Veer Growth Fund, said: "With a market capitalization of approximately 19 trillion rupees, even a 10% increase would require creating nearly 1.9 trillion rupees in incremental value."
New energy platforms such as solar and hydrogen projects are still in the development stage, with limited short-term profit contributions. Thomas Abraham, an analyst at Mirae Asset ShareKhan, noted: "Reliance's recent weakness stems from high capital expenditure and low immediate returns." The retail business is also facing pressure from slowing growth.
Gaurav Bhandari, CEO of Monarch Networth Capital, believes the core business remains strong, and the decline reflects market risk aversion rather than structural weakness. He said: "Some sectors like energy and chemicals face short-term margin pressure, but retail and digital services continue to execute steadily."
Santosh Meena, Head of Research at Swastika Investmart, stated that the current stock price may provide an opportunity for long-term investors. He pointed out: "The company is steadily transitioning from its traditional energy business to high-growth areas such as telecommunications, retail, and new energy." Potential catalysts include the commissioning of new energy gigafactories and business listings.
Analysts expect Reliance Industries may experience short-term volatility, but it remains a core asset for participating in India's consumption and energy transition in the long term. Nomura Securities maintains a positive view, expecting rising oil prices could boost refining margins.
