The current gulf between India’s most valued firm and TCS has stretched more than Rs 6 lakh crore, a gap of such width was last seen on 11 September, 2020
File image of Reliance Industries chairman Mukesh Ambani
India’s most valued firm Reliance Industries passed market capitalisation milestone of $250 billion for the first time with shares hitting a record high on April 28.
The stock traded at Rs 19.20 lakh crore or $250.7 billion, the highest among listed entities in India. A share was quoting at Rs 2,831.95, up 1.93 percent at 13:02 hours IST.
Since October 2021 Reliance has corrected about 18 percent. From March 8 closing, it has gained strength, rising 27 percent to hit a fresh record high of Rs 2,838.5 and has been one of the key stocks to lend support to the market. In the same period, the Nifty50 climbed more than eight percent.
Now the gap between Reliance and Tata Consultancy Services has widened further and hit a nearly 19 month high. Currently, TCS is valued at more than Rs 13.07 lakh crore.
The gulf between Reliance and TCS is more than Rs 6 lakh crore. Such a wide gap was seen last on September 11, 2020 when Reliance was trading nearly at Rs 15 lakh crore and TCS was at nearly Rs 9 lakh crore.
The rally in Reliance comes ahead of March 2022 quarter earnings that are expected to be very strong due to healthy refining margin. Telecom and retail business could also boost quarterly numbers.
International benchmark Brent crude futures closed the March 2022 quarter at $108 a barrel, rising 36 percent since the last day of 2021. “Conversely, Singapore gross refining margin (GRM) trended higher, driven by a 66 percent and 59 percent improvement in diesel and ATF cracks,” said Motilal Oswal which expects 32.5 percent year-on-year growth in profit and 55 percent in revenue in the quarter ended March 2022.
Yes Securities also said Reliance is expected to report improvement in earnings on account of stronger refining margins, offset partially by weaker petrochemical margins. “The telecom segment is expected to benefit from higher average revenue per use (ARPU) realisation and retail segment from sales traction driven by growth in network.”
Profit in full year (FY22) may grow 55 percent and revenue could grow 35 percent.
Recent news developments also aided the rally in Reliance. The conglomerate and Viacom18 on April 27 announced a strategic partnership with Bodhi Tree Systems, a platform of James Murdoch’s Lupa Systems and Uday Shankar.
Through the partnership, they will form one of the largest TV and digital streaming companies in India.
“Bodhi Tree Systems is leading a fundraise with a consortium of investors to invest Rs 13,500 crore in Viacom18, to jointly build India’s leading entertainment platform and pioneer the Indian media landscape’s transformation to a “streaming-first” approach,” said Reliance in its BSE filing. Viacom18 owns and operates the suite of Colors TV channels and OTT platform VOOT.
Two days ago, Reliance signed a shareholder agreement with Abu Dhabi Chemicals Derivatives Company RSC (TA’ZIZ) for the TA’ZIZ EDC & PVC project.
It is a strategic partner with Abu Dhabi National Oil Company (ADNOC) and ADQ, an Abu Dhabi-based investment and holding company, in TA’ZIZ EDC & PVC, a world-scale chemicals development at the TA’ZIZ Industrial Chemicals Zone in Ruwais.
The TA’ZIZ EDC & PVC joint venture will construct and operate a chlor-alkali, ethylene dichloride (EDC) and polyvinyl chloride (PVC) production facility, with a total investment of over $2 billion.
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