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Informist, Wednesday, Jan. 15, 2025

By Anshul Choudhary

MUMBAI – Options traders added bullish bets on Reliance Industries as the company is expected to report a sequential improvement in profitability, driven by better refining margins and strong growth in the telecommunication business. The data show the stock may rise to INR 1,300, an upside of nearly 4%.

Traders covered their short positions at in-the-money and even some out-of-the-money call options. The maximum open interest is at the INR 1,300 strike price, which has over 12 mln contracts. This is followed by around 6 mln contracts at call options of 1,250-1,260 strike prices. Looking at derivatives, Emkay Global Financial Services said the stock is currently trading in a range but could see bullish momentum above INR 1,270.

There were some bullish bets as the stock had fallen over 22% from its lifetime high following the company's disappointing results for the September quarter. While some improvement is expected in the December quarter, overall growth is likely to remain muted. The company will detail its December quarter earnings Thursday.

The conglomerate's consolidated net profit may rise only 3% on year to INR 178.30 billion, according to the average of estimates by 10 brokerages. While the company's largest business segment, oil-to-chemicals, is expected to continue to be a drag on overall profit growth compared with the previous year, its digital services business is likely to show strong growth in profits.

On the put side, traders sold contracts across the board, suggesting that they expect bullish momentum. The highest open interest on the put side was at the strike price of INR 1,200, suggesting that this level could act as support, indicating that the stock may fall 4% if the results are below expectations. The company's retail segment has shown some improvement sequentially on the back of better demand during the festivals in the December quarter, but growth compared to the previous year is likely to be muted, analysts said.

For the Nifty 50, traders are largely expecting range-bound movement amid concerns around the December quarter earnings and caution ahead of Donald Trump taking charge as US president. Options data show the Nifty 50 is likely to face resistance at 23300 points, and may find support at 23200-23000 points. On Wednesday, the Nifty 50 closed at 23213.20 points, up 0.2%.

The January futures contract of the Nifty 50 closed at a premium of 62.75 points to the spot index. Open interest in the contract fell 0.3% to 13.71 million, according to provisional data.

--Nifty 50 Jan closed at 23275.95, up 4.20 points

--Nifty 50 Feb closed at 23409.00, up 9.40 points; 195.80-point premium to spot index

--Nifty 50 Mar closed at 23548.35, down 14.05 points; 335.15-point premium to spot index

Reliance Industries, Axis Bank, HDFC Bank, Trent, Dixon Technologies, Infosys, Kalyan Jewellers, Maruti Suzuki, HDFC Asset Management Co., BSE, Coal India, Bajaj Finance, Kotak Mahindra Bank, and ICICI Bank were the most actively traded underlying stocks Wednesday.  End

Edited by Rajeev Pai

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