Reliance Infrastructure Drops 10.61%: 5 Key Factors Behind the Sharp Weekly Decline

2 February 2026: Fresh 52-Week Low and Downgrade to Sell

Reliance Infrastructure opened the week sharply lower at Rs.121.30, marking a new 52-week low and a 9.71% decline over two days. The stock closed down 4.97% on the day, underperforming the Sensex which fell 1.03%. This decline was accompanied by a downgrade from MarketsMOJO from Strong Sell to Sell, citing weak fundamentals including a low average ROCE of 4.58%, a high Debt to EBITDA ratio of 7.32, and deteriorating technical indicators such as bearish MACD and Bollinger Bands. The company’s Q3 FY25-26 results showed a steep 89.5% drop in Profit Before Tax excluding other income to Rs.221.02 crore and a net loss of Rs.8.88 crore, further dampening sentiment.

On the same day, the stock plunged to its lower circuit limit of Rs.120.98, closing locked at this price amid intense selling pressure and panic selling. Despite modest volumes, delivery volumes surged, indicating active investor participation on the sell side. The stock’s underperformance was stark compared to the Power sector’s 0.74% gain and the Sensex’s 0.22% rise, highlighting company-specific challenges.

3 February 2026: Continued Downtrend and Lower Circuit Hit

The downtrend extended on 3 February as Reliance Infrastructure hit another 52-week low, closing at Rs.114.94 after hitting the lower circuit limit with a 4.99% intraday loss. This marked the eighth consecutive day of losses, with a cumulative decline of 33.64%. The stock underperformed both the Power sector, which gained 2.83%, and the Sensex, which closed down 2.74%. Intraday volatility was high at 7.86%, but the overall trend remained negative.

Trading volumes were robust with a turnover of Rs.24.88 crore, and delivery volumes surged dramatically, signalling sustained selling pressure. The stock remained below all key moving averages, reinforcing the bearish technical setup. Institutional investors continued to reduce holdings, now owning just 6.79% of shares, reflecting waning confidence.

4 February 2026: Sharp Rebound to Upper Circuit

In a notable reversal, Reliance Infrastructure surged to hit the upper circuit limit at Rs.132.66, gaining 4.99% on the day. The stock opened with a gap down of 2.61% but rallied strongly amid robust buying interest and high volumes of approximately 10.7 lakh shares. Delivery volumes on 3 February spiked dramatically, indicating renewed investor conviction despite the prevailing bearish backdrop.

This two-day rally accumulated an 8.27% gain, outperforming the Power sector’s 1.27% and the Sensex’s 0.23% rise. However, the stock remained below all key moving averages, signalling that the broader downtrend was intact despite short-term strength. The upper circuit triggered a regulatory trading freeze, reflecting unfilled buy orders and strong demand at these levels.

5 February 2026: Return to Lower Circuit Amid Selling Pressure

The rally was short-lived as Reliance Infrastructure plunged back to the lower circuit limit at Rs.126.03, losing 4.98%. The stock faced intense selling pressure with a turnover of Rs.15.60 crore and a volume of 12.11 lakh shares. The weighted average price skewed towards the lower end, indicative of panic selling dominating the session.

The stock underperformed the Power sector, which declined by only 0.64%, and the Sensex, which fell 0.59%. Technical indicators remained bearish with the stock trading below all major moving averages. Delivery volumes increased by 18.53%, but selling pressure overwhelmed buyers. The erratic trading pattern and circuit hits underscored the volatile sentiment surrounding the stock.

6 February 2026: Downgrade to Strong Sell and Lower Circuit Close

On the final trading day of the week, Reliance Infrastructure was downgraded further by MarketsMOJO from Sell to Strong Sell, with its Mojo Score falling to 26.0. The downgrade reflected worsening fundamentals, including a persistently low ROCE of 4.58%, a high Debt to EBITDA ratio of 7.32, and deteriorating quarterly financials with a 19.3% decline in net sales and a net loss of Rs.8.88 crore.

The stock closed at Rs.119.73 after hitting the lower circuit limit with a 5.0% loss, underperforming the Power sector’s 0.3% decline and the Sensex’s 0.41% fall. Trading volumes were substantial at 6.88 lakh shares, with most trades executed near the day’s low, indicating sustained selling pressure and unfilled supply. Delivery volumes dropped by over 50%, suggesting reduced long-term investor participation.

Technical indicators remained firmly bearish, with the stock trading below all key moving averages and negative momentum confirmed by MACD and Bollinger Bands. The stock’s proximity to its 52-week low and persistent underperformance relative to benchmarks highlight elevated risks and limited near-term upside.

Key Takeaways

The week’s price action for Reliance Infrastructure Ltd was dominated by intense volatility and a clear bearish bias. The stock’s 10.61% weekly decline starkly contrasts with the Sensex’s 1.51% gain, underscoring company-specific challenges. Multiple lower circuit hits on 2, 3, 5, and 6 February reflect panic selling and unfilled supply, while the brief upper circuit surge on 4 February indicates short-lived buying interest.

Fundamentally, the company faces significant headwinds with weak profitability, high leverage, and declining institutional ownership. The downgrade from Sell to Strong Sell by MarketsMOJO highlights deteriorating technical momentum and subdued financial performance. Despite an attractive valuation on an enterprise value to capital employed basis, the stock’s persistent underperformance and negative technical indicators suggest limited near-term recovery prospects.

Investor participation has been erratic, with delivery volumes spiking during sell-offs and declining sharply on the last day, indicating cautious sentiment. The stock’s trading below all key moving averages and bearish momentum oscillators reinforce the downtrend. Relative to the Power sector, which showed resilience, Reliance Infrastructure’s weakness appears company-specific.

Conclusion

Reliance Infrastructure Ltd’s performance during the week of 2 to 6 February 2026 paints a challenging picture for investors. The stock’s sharp decline, multiple circuit hits, and downgrade to Strong Sell reflect a confluence of weak fundamentals, deteriorating technicals, and negative market sentiment. While valuation metrics suggest potential value, the persistent operational and financial headwinds, combined with bearish momentum, limit the stock’s near-term appeal.

Investors should remain cautious and monitor upcoming corporate developments and sector trends closely. Until there is clear evidence of fundamental improvement or a technical reversal, the stock is likely to remain under pressure amid a volatile trading environment.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →