RIL bull run fizzles on margin concerns

Reliance Industries fell 1.6 percent, as investors booked profits on concerns the energy conglomerate would see lower refining margins.

Despite the falls on Thursday, Reliance shares are still up 6.8 percent for the month, nearly double the 3.5 percent gain in the broader NSE index.

Domestic brokerage Prabhudas Lilladher downgraded Reliance Industries to "reduce" from "accumulate" on concerns over sustainability of refining margins.

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"As we believe the current boost in the refining segment is temporary, we would refrain from getting positive on RIL," the Prabhudas note said.

"Post the recent uptick in RIL stock, we believe that limited commodity driven upsides and absence of meaningful E&P news flow in the near term make the risk reward unfavourable," it added, referring to exploration and production.

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Reliance shares have gained 9.9 percent since posting a lower-than-expected quarterly profit drop on July 20 after refining margins fell less than expected.

Reuters