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Reliance Industries share price tanks more than 7%. Is this a good buying opportunity?

Reliance Industries share price fell over 7 percent in Friday’s session after the Government of India (GoI) imposed taxes on windfall earnings made by domestic refiners. On Friday, Reliance share price opened with a bearish gap at the close 20 per share and touched its intraday low 2,365 each, giving its shareholders the fear of a lower circuit hit. However, the stock recouped its early morning losses in the second half and ended 2,406 per share level on the NSE.

According to stock market experts, export-oriented oil production companies are expected to reap staggering returns from cheap crude oil made available by the Russian government. In that scenario, Reliance Industries Ltd (RIL), one of the largest diesel exporters in India, is also expected to experience windfall earnings. Hence, the GoI move is aimed at asking for its share in the additional revenue that Reliance and other oil producing companies are expected to collect after the Russia-Ukraine war. Reliance Industries shares are expected to feel pressure as the market expects further discount on Reliance shares next week, he said.

Commenting on the reason behind the decline in Reliance share price, Avinash Gorakshakkar, head of research at Profitmart Securities, said, “GoI’s imposition of tax on windfall earnings made by domestic oil refineries has not gone down well on Dalal Street. Reliance shares nosedived on Friday. As Reliance is one of the leading diesel and other oil exporting companies in India, it will continue to take losses. Expected. Hence, Reliance shares may remain under pressure next week as the market may. Further concession to this GoI move.”

What does the technical chart indicate regarding Reliance share price pattern, Rohit Singhre, AVP- Technical Research at Bonanza Portfolio, said, “Reliance share price has strong support. 2360 steps per. If the stock continues above this level during the first half of Monday’s session, then only we can expect a slight rebound on the counter. Otherwise, the negative bias in stocks will continue.

Rohit Singhre of Bonanza Portfolio added on the breach 2360 support, there may be further sharp downside movement. So, those who want to take a fresh long position on the counter, are advised to wait for some time as this quality stock can be fetched at a huge discount in the next few sessions.

Meanwhile, Prabhudas Lilladhar upgraded his target on Reliance Industries stock. 3,000 per share 3,277 per share in the long run, citing “RIL discount Russian crude (more than USD 30/bbl discount) and EU exports are better positioned to take advantage of tighter market conditions, given higher processing complexity. We believe higher gas prices. In telecom (further tariff hike) and retail (Store expansion) Strong growth, make RIL a preferred play in challenging times.’Buy’ with revised PT 3,277 per share.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies and not of Mint.

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