Overview

• Reliance Infrastructure share price rose to its upper circuit at Rs. 182.47 with a 3.63% gain on the day and volume exchanged at over 22.7 lakh shares.

• The stock remains deeply undervalued against its sector peers with a TTM PE of 1.36 and P/B of 0.57.

• It has, however, remained below key moving averages despite short-term gains, underlining limited long-term momentum until the fundamental picture strengthens.

Reliance Infrastructure (RInfra) share price had a strong up move in today's trading session, reaching its upper circuit limit and an intraday high of Rs. 182.47. It opened at Rs. 177 and finally closed at Rs. 180.10, up 3.63% from the previous close of Rs. 173.79. With this rise, the market capitalisation of the company rose to around Rs. 7,134 crore, reflecting renewed investor interest in the stock. 

Trading volume soared to 22.78 lakh shares, as compared to the 20-day average volume of 15.53 lakh shares. The total turnover during the session amounted to Rs. 41.04 crore, demonstrating healthy participation by traders and investors. The VWAP also reached Rs. 180.43, indicating consistent demand throughout the day. Let’s explore a Reliance Infrastructure share price analysis based on Moneycontrol data. 

Stock Performance and Technical Indicators

During intraday trading, Reliance Infrastructure shares reached the upper circuit limit of Rs. 182.47, with the day’s low at Rs. 176.50. The lower circuit limit was placed at Rs. 165.10. Despite this recent surge, the share remains well below its 52-week high of Rs. 423.40 and significantly under its all-time high of Rs. 2,641. On the downside, the 52-week low for the stock is Rs. 164.10, suggesting the recent rebound may be part of a short-term recovery trend.

Reliance share price chart on Moneycontrol shows gains of 2.34%:

From a technical viewpoint, the stock is well below key moving averages, below the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This shows that while short-term momentum is improving, the longer-term trend remains weak. The beta of 1.55 is indicative of higher volatility than the broader market; however, this makes it an active trader's favorite.

Also Read: IRFC Share Price Holds at Rs. 119: Investors Eye Railway Financing Momentum

Financial Metrics Indicate Deep Value

The valuation metrics for Reliance Infrastructure stock look very enticing. The company has reported a trailing twelve-months P/EPS of Rs.  132.05, which has gone up by a massive 547.31% YoY. The P/E is at just 1.36, below the sector average P/E of 27.93. Likewise, the P/B is 0.57, and that shows that the stock is trading at a steep discount to its intrinsic value.

Further, the book value per share of INR 317.97 underlines the undervaluation, with the current price standing nearly 43% below this figure. However, at the moment, the company doesn't offer a dividend yield, that could be a factor for income investors.

Recent Momentum and Investor Sentiment

The stock had impressively witnessed recent momentum, a two-day gain of over 6%, outperforming its sector by 3.29%. This resurgence in price is largely propelled by speculative buying and short-term optimism in the power and infrastructure sector. The optimism has been given a boost following the expectations of better project execution and subsequently improved cash flows in the coming quarters.

Despite the recent gains, the delivery volumes are down by close to 57.71% as compared to the 5-day average, which suggests that most of the action is at the hands of short-term traders rather than long-term investors.

Investor Outlook

Reliance Infrastructure share price is showing signs of a recovery on rising volumes and fresh market interest. However, its trading below major moving averages suggests that a sustained breakout would depend on consistent buying and good fundamental triggers.

Also Read: BSE Share Price Jumps Nearly 7% After Strong Q2 Results

Conclusion

The recent rally has been a signal for short-term strength, but investors need to exercise caution considering the historical volatility and technical resistance levels of the stock. A close above Rs. 185 on strong volume could open up further upside, but more sustained gains depend upon an overall improvement in financial performance and stability in the broader market.

FAQs

1. Why did Reliance Infrastructure's stock experience its upper circuit today?

The upper circuit was due to strong buying activity and positive sentiment from investors. The ‘buying’ channel increased trading volumes and speculative momentum, and the stock reached Rs. 182.47 per share, a gain of 3.63% from the preceding close.

2. Is there a fair value in Reliance Infrastructure right now?

Yes, the undervalued status is based on valuation metrics. The company's PE ratio is 1.36, while the P/B ratio is 0.57, which are well below sector performance averages. Clearly, there are avenues for deep value in Reliance Infrastructure for long-term holders.

3. Should investors buy Reliance Infrastructure at this price level?

Despite the valuation metrics, investors should refrain from complacency as the stock trades below major moving averages indicator of weak long-term bullish momentum. Any sustainable upward trend must come from consistent growth in Reliance Infrastructure's earnings, along with the sector's movement into the bullish territory.

4. What are the primary risks of Reliance Infrastructure shares?

Increased volatility could cause considerable loss to holders. There is also the heavy amount of debt Reliance is exposed to, as well as characteristics of the infrastructure project execution in the sector. Short-term traders could negatively affect the stock price, increasing risk for long-term holders.

5. What is the future outlook for Reliance Infrastructure’s share price?

If the stock stays on track and breaks above Rs. 185 with significant volume, it may continue to rise in the short run. Longer-term upside will be based on fundamental improvements and the overall market.