Reliance overtakes TCS again as India’s most valued firm

Reliance overtakes TCS | Insights Success

Mukesh Ambani owned conglomerate, Reliance Industries Limited (RIL) has again stood as the country’s most-valued firm by overtaking Tata Consultancy Services (TCS) as per market capitalization (m-cap). It is the first rise in RIL’s market capitalization since April 2018.

According to BSE’s data, the m-cap of Reliance Industries stands at INR 7,47,644.64 crore where, TCS holds m-cap of INR 7,39,967.87 crore. Various reports suggested that the oil-to-telecom conglomerate’s share price rose by 18% in the first-quarter. Where, TCS has generated USD 5 billion quarterly revenues for the first time in Q1.

The suggested reports stated that the company’s outperformance in first-Q was led by petrochemical and refining realizations. With the expansion in the capacity, RIL witnessed around 35% of hike in volumes. The revenue of energy cum telecom conglomerate rose from INR 90,537 crore to INR 1.4 trillion i.e. 56.5% of growth. And, gross refining margins (GRMs) settled at USD 10.5 per barrel quite lesser than previous years USD 11.90 per barrel. On the other hand, its telecom arm Reliance Jio has been profited with INR 612 crore in the quarter of June.

“Reliance Jio continued to show strong subscriber momentum, in line with our expectation. However, flattish sequential ARPU despite cash back offers and changes to prime membership are surprises. Focus remains on onboarding more subscribers and driving engagement; price increase appears less of a focus for now,” said Morgan Stanley in a note to its investors latter presented to various media firms.

Whereas, several previous reports stated that TCS has shown the fastest pace of profit rise in two years for about 24%, due to robust growth in banking, financial services and insurance. TCS has subjected to grow its revenue by 16% to 34,261 crore.

“TCS had a strong quarter witnessing a healthy growth on back of turnaround in the BFSI segment of the North American market and the management expects the growth to sustain in the coming quarters… TCS is on track to achieve its targeted double-digit growth in FY19. Yet, we believe that at current valuations, the stock is fairly priced from a short to medium-term perspective,” said Indsec Securities in 12 July note for the media domain.

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