TCS dethrones RIL as most valued company

Tata Consultancy Services (TCS), India’s top software exporter, on Friday became the country’s most valued company by elbowing out the Mukesh Ambani-led Reliance Industries Ltd (RIL) from the top spot.

As of on Friday’s close, the total market capitalisation of TCS stood at Rs 2,27,280 crore, while that of RIL was Rs 2,26, 898 crore. RIL shares fell 2.81 per cent to Rs 692.90 on the Bombay Stock Exchange, the lowest close since March 2009. In comparison, TCS shares lost only 0.35 per cent to close at Rs 1,161.25.

RIL has remained the country's most valued firm for many years, except for a brief period in August this year when it first lost its top spot to state-run Coal India, then regained it and was again overtaken by another state-run firm, ONGC.

REACHING THE TOP
Rank	Company	M-cap in Rs crore
1	TCS	227,280
2	Reliance Ind.	226,898
3	ONGC	219,833
4	Coal India	190,028
5	Infosys	158,775
6	ITC	156,935
7	NTPC	132,422
8	Bharti Airtel	130,217
9	SBI	102,838
10	HDFC Bank	99,949
Data compiled by BS Research Bureau

TCS shares have lost just 0.33 per cent in 2011, while the RIL stock has plummeted 34.53 per cent during the same period.

Shares of Indian software exporters like TCS, which earn a majority of their revenue in dollars, have done relatively better in this year due to a sharp depreciation in the Indian currency against the greenback. The BSE IT has lost 15.73 per cent in 2011 compared with a 24.65 per cent drop in the Sensex.

“TCS is not among the stocks that are highly volatile. If the rupee continues to depreciate, it will help the company continue with its lead, as it will be hard for RIL to catch up,” said Deepak Mohoni, founder of Trendwatch (India). “Else, I think for the next couple of months these two companies will be neck and neck as far as market capitalisation is concerned,” he added.

IT analysts, however, are not reading too much into TCS topping the market-cap chart. “What has helped TCS is the rupee movement more than anything else. So, I do not want to read too much into this. You also have to remember that these are cycles,” said Harit Shah, senior research analyst at Nirmal Bang Institutional Equities.

“Market-cap is a volatile factor, it changes every day. The ideal way to look is if this is sustainable,” said Viju George, an analyst at JP Morgan.