Reliance Industries’ share price fell more than 7% in Friday’s session after the Government of India (GoI) levied taxes on windfall gains made by domestic refineries. On Friday, Reliance stock price opened with a bearish spread close to 20 per share and then hit its intraday low of 2,365 each, causing its shareholders to fear touching the lower circuit. However, the stock pared its early morning losses in the second half and finished at 2,406 levels per share on NSE.

According to stock market experts, export-oriented oil manufacturing companies are expected to earn astronomical revenues from the cheaper crude oil made available by the Russian government. In this scenario, Reliance Industries Limited (RIL), which is one of the largest diesel exporters in India, is also expected to make exceptional gains. Thus, the decision of the Indian government aims to ask for its share of the additional revenues that Reliance and other oil companies should receive after the Russian-Ukrainian war. They said Reliance Industries shares should feel the pressure as the market is expected to cut Reliance shares further when the market opens next week.

Speaking on the reason for the drop in Reliance share price, Avinash Gorakshkar, Head of Research at Profitmart Securities, said: “The Indian government levies taxes on windfall gains made by domestic oil refineries n It hasn’t gone down well on Dalal St. to see from this vantage point.As Reliance is one of India’s leading diesel and oil exporting companies, it is expected to continue to be battered. Thus, Reliance shares may continue to remain under pressure next week as well, as the market may further discount this GoI move.”

On what the technical chart suggests with regards to the price structure of Reliance stock, Rohit Singre, Assistant Vice President of Technical Research at Bonanza Portfolio, said, “Reliance stock price is benefiting from strong support for 2360 levels each. If the stock continues to stay above this level in the first half of Monday’s session, only then can we expect a rebound in the meter. Otherwise, the negative bias would continue into the title.”

Bonanza Portfolio’s Rohit Singre went on to add that in the event of a breach of 2360 support, there may be further downside moves. So, those who want to take a new over the counter buy position, they are advised to wait for some time as they might get this quality stock at a more discount price in the coming sessions.

Meanwhile, Prabhudas Lilladher has upgraded his Reliance Industries share target of 3,000 per share at 3,277 per share long-term citing, “RIL with access to discounted Russian crude (over $30/bbl discount) and EU exports best positioned to capitalize on tight market conditions, account given the high complexity of refining We believe that higher gas prices as well as strong growth in telecom (continued rate increases) and retail (store expansion), make RIL a preferred choice in these challenging times . 3,277 per share.”

Disclaimer: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.

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