Shares of Reliance Industries rose nearly 5% on Friday and were set for their best week in six months, as the company beat quarterly profit estimates on a boost from its retail business, which had dragged the stock's performance in 2024.
Reliance, India's most valuable company and the second-top heavyweight stock on the benchmark Nifty 50 index, was last up 2.2% and has gained 3.4% this week.
The Nifty fell 0.9% on the day and is down 1.4% for the week.
"Reliance is back on a growth path after six months of challenges," Morgan Stanley said in a note, adding that "the risk of earnings downgrades" would unwind.
Also read: Reliance Industries' Q3 net profit rises by 7.4% to ₹18,540 crore
Late on Thursday, the Mukesh Ambani-led conglomerate reported a bigger-than-expected third-quarter profit as festive demand boosted the retail segment, while tariff hikes and 5G consumption drove the telecom business.
At least six brokerages raised their ratings on the "buy"-rated stock after results, while four raised price targets, as per data compiled by LSEG.
{{/usCountry}}At least six brokerages raised their ratings on the "buy"-rated stock after results, while four raised price targets, as per data compiled by LSEG.
{{/usCountry}}Better-than-expected performance at Reliance's retail unit is likely to support the stock in the near-term, analysts at J.P.Morgan said, adding that the stock could reverse its recent decline.
Reliance shares fell about 6% in 2024, their first annual drop in a decade on worries over falling refining margins and growth worries in the retail segment.
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"We are enthused by the strong performance in the third quarter, especially in retail, where softness in this segment has been a key drag on stock performance and investor sentiment, which we believe should now reverse," Citi analysts said in a note.