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Reliance Industries briefly tops TCS in valuation for first time in over 4 years

LiveMint logoLiveMint 18-04-2017 Ami Shah

Mumbai: Reliance Industries Ltd (RIL) became the most-valued Indian company early on Tuesday to trade at a market value of Rs4.57 trillion, surpassing top software services exporter Tata Consultancy Services Ltd for the first time in more than four years.

Earlier in the day, shares of the Mukesh Ambani-controlled company rose as much as 1.37% to Rs1,410 taking its market capitalization to Rs4.57 trillion. The company surpassed TCS in market value to claim the top spot for the first time since 13 February 2013.

The shares later erased early gains. At 2:09pm, RIL shares were up 0.1% at Rs1,391.65 per share, while the Sensex index was trading 0.4% higher at 29,521.13 points.

Shares of TCS were up 0.1% at Rs2,322.25, ahead of its March quarter earnings to be announced later in the day.

According to estimates of 26 Bloomberg analysts, the company may post a net profit of Rs6,654.60 crore, while net sales will be at Rs29,893.10 crore.

RIL shares have gained 29.3% year-to-date, while TCS shares have eroded 1.71% in the same period. RIL shares have been boosted by the launch of Reliance Jio and steady core revenue growth, while TCS shares are under pressure due to the brunt of a transition to cloud-computing model from the conventional IT model in the industry, H1B visa curbs and rising protectionism by the US government, along with the recent appreciation of rupee.

“Jio is a success story and is giving visibility on earnings. The company is expected to show revenue of around Rs35,000 crore in the fiscal year 2018,” said Deven Choksey, group managing director of KR Choksey Investment Managers Pvt. Ltd. “Capacity expansion in other core businesses is also happening at the right time, when demand is picking up. RIL, therefore, is well-placed to produce volume- and margin-led growth in refining business,” added Choksey.

The Indian rupee has appreciated 5.3% against the US dollar so far this year, and is currently trading at Rs64.51 per US dollar.

Currently, RIL shares have 27 buy/outperform ratings from analysts, 11 neutral ratings, while one sell/underperform rating, hinting that there is more conviction in the current rally than earlier, data from Bloomberg showed.

On 13 February 2013, when RIL was the most-valued company on the Indian bourses, 17 , 23 and 10 brokerages gave them ratings of buy/outperform, neutral and sell/underperform, respectively.

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