RIL becomes India's most valued firm again; surpasses TCS in market cap

RIL market capitalisation stood at Rs 7.51 trillion, more than TCS' of Rs 7.43-trillion valuation, as per BSE data.

Reliance Industries on Tuesday regained the status of the country's most valued firm in terms of market valuation, surging past information technology (IT) giant Tata Consultancy Services (TCS) in intra-day trade.

RIL market capitalisation (m-cap) stood at Rs 7.51 trillion, more than TCS' of Rs 7.43-trillion valuation, as per BSE data.

Earlier on April 11, 2018, RIL had m-cap of Rs 5.89 trillion and TCS of Rs 5.77 trillion on closing level basis.

Thus far in the month of July, RIL has rallied 22%, while TCS up 5% on the BSE. On comparison, the S&P BSE Sensex was up 6%.

RIL hit a new high of Rs 1,190, up 3.5%, extending its 4% gain in past two trading days, after the company reported 17.9% year on year (yoy) growth in consolidated net profit at Rs 94.59 billion in June quarter (Q1FY19). During the June quarter, its consolidated revenue grew 56.5% yoy at Rs 1,417 billion.

The company’s consumer businesses accounted for nearly 21% of consolidated segment EBITDA. Retail business revenues have more than doubled and EBITDA has trebled on a yoy basis. Jio added a record number of subscribers, highlighting the compelling technology and value proposition that Jio offers vis-à-vis other networks.

Analysts at Elara Capital remains positive on margin and volume expansion of petchem due to refinery-off gas cracker (ROGC) plant benefits and revenue visibility from telecom (Jio).

“We raise target price to Rs 1,285 from Rs 1,141 on higher earnings from organized retail, higher refining EV/EBITDA multiple at 7.5x from 7.0x on expectation of more bullish refining outlook in long term,” the brokerage firm said quarterly update.

“With commissioning of mega core projects, we expect free cash flow (FCF) to turnaround, RoE to rise and profit to double in 4 years. Successful execution of RJIO bolsters our confidence in the mega venture. We factor higher Brent forecast of $68 ($66 earlier) and raise FY20EPS 7 per cent given high oil price leverage for key projects as well as higher retail contribution,” Edelweiss Securities said in result update. The brokerage firm maintain ‘BUY’ rating on the stock with upgraded target price of Rs 1,457 (Rs 1,201 earlier).