Author: Supriya Jena

2024 hasn’t been a good year for Reliance Industries (RIL). People are worried because RIL’s shares are likely to end the year with losses, which hasn’t happened in almost ten years. The company’s value dropped by more than Rs 4.4 lakh crore since it peaked in July, with shares falling about 21% from their highest point of Rs 1,608.95.

In the past, RIL had great years, like a 70.55% return in 2017. But things slowed down in 2021 with just 19.32%, and it got worse: 7.60% in 2022 and only 1.44% last year. This year looks even worse due to slow earnings impacted by a tough economy.

Challenges for Reliance Retail

Reliance Retail (RR) also faced many problems this year, especially in the fashion sector. The company needed to close 1,185 stores and isn’t making enough money, even though more people are visiting the stores. Competition from quick delivery companies has made it harder for RR.

However, analysts like Jefferies believe RR remains a strong player and should focus on better opportunities to attract more investors. They still recommend RIL as a good investment with a target price of Rs 1,700.

What’s Next for RIL?

Another brokerage, JPMorgan, says RIL looks good compared to other high-priced stocks. To boost its shares, RIL needs better earnings, especially from its retail branch. Since RR is valued less than its competitors like DMart, any rise in its value could help RIL’s stock price.

RIL’s growth used to come from investing in refineries and chemicals, but now, RR and Telecom bring in about half of RIL’s profits. RIL is expected to make positive cash flow in the future and aims to keep its debts low.

Mukesh Ambani, once worth $120.8 billion, sees his wealth fall to about $96.7 billion. He is now focusing on digital services, retail brands, and green energy for future growth.

Future IPOs

Ambani plans to list Jio on the stock market in 2025, which could be worth over $100 billion. However, an IPO for the retail section may come later, depending on how the company handles its internal problems.

Despite facing many challenges in the retail market, Reliance is still moving forward with plans like a partnership with Walt Disney for a big media company in India and working with Nvidia to build AI technology. RIL remains valuable, but the oil sector problems have affected its stock prices

Vedanta, a major company, is making headlines as its board has approved a new dividend of Rs 8.5 per share for the financial year 2024-2025. This means that the total payout will be around Rs 3,324 crore! The date for shareholders to qualify for this dividend is set for December 24, 2024.

On Monday, Vedanta’s share price closed at Rs 513.50 on the NSE, which was a drop of Rs 6 or 1.15% from the last trading day. So far in the financial year 2025, Vedanta has given out a dividend totaling Rs 35 per share. Over the past year, this adds up to Rs 46 per share in total dividends.

The last time Vedanta paid a dividend was Rs 20 per share on September 10, 2024. This followed dividends of Rs 4 on August 2, 2024, and Rs 11 on May 24, 2024.

In its latest financial report, Vedanta announced a profit of Rs 5,603 crore for the three months ending in September 2024. This is a huge improvement compared to a loss of Rs 915 crore during the same time last year! However, their revenue decreased by 4% year-on-year, totaling Rs 37,171 crore, down from Rs 38,546 crore last year.

The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) for this period were Rs 9,828 crore, with profit margins at 26.1%. Vedanta also achieved record-high aluminum production of 609 kilotonnes in the second quarter, which is a 3% increase from last year. The cost of producing aluminum fell by 4% to $1,734 per tonne, while alumina production rose by 8% to 499 kilotonnes.

Arun Misra, the Executive Director of Vedanta, said that the second half of this year will be exciting as important growth projects are getting ready to start.

On Monday, the Nasdaq stock market reached a new record high, and the S&P 500 also saw some gains. Investors are looking closely at the latest economic data and are excited about the Federal Reserve’s upcoming decision on interest rates, which will be announced on Wednesday.

Most investors believe a rate cut is very likely, with a 95.4% chance of a 0.25% drop. This means the Fed might lower rates to help support the economy. However, experts like Sam Stovall suggest that even with a cut, the Fed may still be cautious and might not plan many more cuts next year than some people expect.

In terms of economic health, the S&P Global reported a drop in manufacturing activity, with the latest numbers showing a reading of 48.3. This is lower than economists predicted and signifies potential issues as higher tariffs could raise prices on imported materials next year.

On the market front, the Dow Jones Industrial Average fell by 110.58 points (0.25%), closing at 43,717.48. Meanwhile, the S&P 500 went up by 22.99 points (0.38%) to reach 6,074.08, and the Nasdaq climbed by 247.17 points (1.24%) to 20,173.89. The Nasdaq has now seen four weeks of gains, while the Dow has dropped for eight straight days.

Prominent companies performed well, with Alphabet (Google’s parent company) rising by 3.6% and Tesla jumping by 6.1%. Tesla’s stock price target was recently raised to a record $515 by Wedbush Securities.

As investors await the Fed’s decision, they will also pay attention to retail sales data coming out on Tuesday to see how strong consumer spending is.

This year, the S&P 500 has grown more than 27% due to optimism around companies benefiting from artificial intelligence, the Fed’s expected rate cuts, a strong economy, and anticipated business-friendly policies from Donald Trump’s upcoming administration.

Honeywell International’s stock rose by 3.7% after they revealed plans to consider separating their aerospace business. Among the stocks traded, more declined than advanced on the NYSE, while there were more advances than declines on the Nasdaq.

Overall, the S&P 500 saw 14 new highs and 18 lows, with the Nasdaq recording 112 new highs and 193 new lows. The total volume of shares traded was 15.33 billion, compared to the average of 14.04 billion shares in the last 20 trading days.