Stock Price Movement and Volatility
On the day the new low was recorded, Reliance Infrastructure opened sharply lower by 4.99%, setting the tone for a volatile session. The stock’s intraday range was wide, touching a high of Rs.126.80 and a low of Rs.115.25, resulting in an intraday volatility of 8.44% based on the weighted average price. This heightened volatility underscores the uncertainty surrounding the stock’s near-term price direction.
Over the last three trading days, the stock has consecutively declined, delivering a cumulative return of -11.87%. Notably, the stock has experienced erratic trading patterns, having not traded on three separate days within the last 20 sessions, which may indicate liquidity or market interest issues.
Reliance Infrastructure’s price currently trades below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling a sustained bearish trend. This contrasts with the broader Power sector, which has gained 2.88% on the same day, highlighting the stock’s relative underperformance.
Market Context and Sector Performance
The broader market environment on 3 Feb 2026 was marked by a loss of momentum in the Sensex after an initial gap-up opening of 3,656.74 points. The index subsequently fell by 1,452.64 points, closing at 83,870.56, which is 2.73% below its 52-week high of 86,159.02. Despite this, mega-cap stocks led the market gains, contrasting with Reliance Infrastructure’s decline.
Within the Power sector, Reliance Infrastructure’s underperformance is notable given the sector’s positive movement. This divergence emphasises company-specific factors influencing the stock’s price rather than broader sectoral trends.
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Financial Performance and Profitability Metrics
Reliance Infrastructure’s recent quarterly results reflect subdued financial performance. Profit Before Tax excluding Other Income (PBT less OI) for the quarter stood at Rs.221.02 crore, representing a sharp decline of 89.5% compared to the previous four-quarter average. The company reported a net loss after tax (PAT) of Rs.8.88 crore, a 100.9% fall relative to the same benchmark.
Net sales for the quarter were Rs.4,296.52 crore, down 19.3% from the prior four-quarter average, indicating a contraction in revenue generation. These figures highlight challenges in maintaining top-line growth and profitability.
Long-term financial strength remains weak, with an average Return on Capital Employed (ROCE) of 4.58%, which is below industry standards. The company’s ability to service debt is constrained, as evidenced by a high Debt to EBITDA ratio of 7.32 times, signalling elevated leverage and potential financial strain.
Shareholding Trends and Institutional Participation
Institutional investors have reduced their stake in Reliance Infrastructure by 1.57% over the previous quarter, now collectively holding 6.79% of the company’s equity. This decline in institutional participation may reflect concerns about the company’s fundamentals and outlook, given these investors’ typically rigorous analysis capabilities.
The stock’s Mojo Score currently stands at 31.0, with a Mojo Grade of Sell, downgraded from a previous Strong Sell rating on 31 Jan 2026. The Market Cap Grade remains low at 3, underscoring the company’s diminished market valuation relative to peers.
Historical Performance and Valuation
Over the past year, Reliance Infrastructure has generated a negative return of 47.58%, significantly underperforming the Sensex, which posted an 8.66% gain over the same period. The stock’s 52-week high was Rs.425, illustrating the extent of the decline to the current low of Rs.115.25.
Despite the weak price performance, the company’s valuation metrics suggest a very attractive valuation. The ROCE of 3.8 and an Enterprise Value to Capital Employed ratio of 0.4 indicate that the stock is trading at a discount compared to its peers’ historical averages. Additionally, profits have risen by 1010.2% over the past year, a notable improvement amid the price decline.
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Summary of Key Concerns
The stock’s fall to a 52-week low is underpinned by a combination of weak financial results, high leverage, and declining institutional interest. The persistent underperformance relative to the sector and broader market indices further accentuates the challenges faced by Reliance Infrastructure. Erratic trading patterns and high intraday volatility add to the uncertainty surrounding the stock’s price stability.
While valuation metrics indicate the stock is trading at a discount, the company’s low ROCE and elevated Debt to EBITDA ratio highlight ongoing financial constraints. The recent downgrade in Mojo Grade to Sell reflects these fundamental weaknesses.
Reliance Infrastructure’s performance over the last year and longer-term periods has been below par, with negative returns contrasting sharply with the positive gains of the Sensex and the Power sector. This divergence emphasises the stock’s current difficulties within its industry context.
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