Among the Street biggies, Tata Group saw the maximum growth in wealth in the September quarter, with its market cap going up R77,143 crore. IT giant TCS was the biggest contributor to this, adding R62,433 crore during the period.
At the other end, RIL Group and the Anil Dhirubhai Ambani Group (ADAG) were the biggest losers, together shedding R51,629 crore in market cap.
Analysts feel TCS’s foray into Japan could provide a new trigger. “We believe that a sharp stock correction in the near term is a buying opportunity as TCS still remains the most well-positioned player in a zero-sum game. TCS is, in our view, a leading provider of solutions and services in the digital space (including mobility, analytics and e-channel).
It has clear strength in pricing and managing large-ticket FP deals. If TCS is able to break into the Japanese market, that could provide a new growth lever,” said HSBC in a report.
For the RIL Group, Reliance Industries accounted for a bulk of m-cap loss at R22,275 crore. The group’s market cap eroded by R24,707 crore to R3.16 lakh crore.
Nevertheless, brokerages remain upbeat on RIL. “A favourable regulatory scenario for domestic E&P and a quick and profitable ramp-up in telecom could unlock latent value. Together with greater confidence on timelines of new downstream projects, Reliance could start discounting FY18 EPS significantly ahead of our expectations,” said Barclays in a recent note.
On the other hand, ADAG’s market cap was dragged lower by R-Power, which saw R10,659 crore of its market wealth being creamed off in the September quarter.
Analysts have a bearish view on R-Power. “Reliance Power offered little surprises with earnings, with higher cost of generation during the quarter almost entirely reflecting in the tariffs as a bulk of sale happens under the cost-plus tariff regime. While earnings from extant projects remain healthy, a lack of clarity on gas supplies and usage of surplus coal for Chitrangi, coupled with slow execution on projects beyond Sasan, prevent us from taking a constructive stance. We maintain sell with a target price of R62,” Kotak Institutional Equities said in a report.