Reliance Industries (RIL) on Tuesday briefly overtook Tata Consultancy Services (TCS) and became the most valued company in India after its market capitalisation touched Rs 4.58 lakh crore. Earlier, in February 2013, RIL had surpassed TCS in market value.
However, Reliance could not hold on to its gains and ended Tuesday’s trade at Rs 1,370.45, with a market capitalisation of Rs 4.45 lakh crore. Shares of TCS ended the session at `2,308 and regained its position as the most valued Indian company.
Investors were cautious on TCS ahead of its financial results for the quarter ended March 31, 2017. TCS’ net profit rose to `6,608 crore for the quarter ended March 31, 2017 from `6,340 crore during the same period a year ago, and its revenue rose 4.2% y-o-y to `29,642 crore.
In February 2017, RIL stock crossed the `4 lakh-crore-mark in terms of market capitalisation for the first time since May 2008. The value of RIL stock has been rising since its telecom arm Jio announced that it will charge its customers and revenue growth in its core business.
According to Bloomberg consensus estimates, RIL may post a net profit of `8,046 crore and revenue growth of 44% year-on-year at `86,908 crore. In FY17, shares of RIL rose 26% against Sensex’s rise of 17%, while shares of TCS fell by 3.4%. AK Prabhakar, head of research at IDBI Capital, said the Reliance stock could appreciate further and hit `1,800 by the end of FY18.
Prabhakar further said that things will change if RIL’s telecom division becomes a break-even business as its earnings potential has not been factored in valuations.