Reliance Industries becomes 1st Indian company to cross Rs 9.5 lakh crore market cap

Reliance Industries Limited (RIL) became the first Indian firm to cross the Rs 9.5 lakh crore market capitalisation mark today after the stock hit its fresh 52-week high on bourses. The rise in RIL share price comes after Vodafone India and Bharti Airtel announced a tariff hike from December. The tariff hike is likely to attract more subscribers for Reliance Jio.

Reliance Industries share price rose up to 3.66% to Rs 1,511.9 compared to the previous close of Rs 1,458.50 on BSE.

TCS, its closest rival in terms of market capitalisation, recorded a m-cap of Rs 7.91 lakh crore on BSE.  The IT firm's share price was trading 2% lower at Rs 2110 on BSE.

Earlier in October, the Mumbai-headquartered Reliance Industries hit the milestone as the first Indian company to cross the staggering Rs 9 lakh crore market-cap mark.

Rivals Vodafone Idea and Bharti Airtel have decided to hike tariffs from December 1 on both pre and post-paid subscriptions to ensure operational viability. This decision of raising tariffs comes as a trend reversal in the telecom industry, which has seen more than a decade of price cuts due to hyper-competition.

Shares of Reliance industries have risen 34% on a year-to-date basis.

Brokerage Bank of America Merrill Lynch has pegged market cap of RIL at $200 billion in 24 months.  Mukesh Ambani-led Reliance Industries is likely to become first Indian company to reach $200 billion market cap in 24 months backed by its new commerce venture and fixed broadband business, Bank of America Merrill Lynch (BofA-ML) said in a report in October.

The stock is likely to receive additional boost with several initiatives Reliance Industries has undertaken. New commerce initiative of empowering Kiranas in unorganised retail market by offering MPoS (mobile point-of-sale), entry into SME enterprise space with Microsoft, Jio's fiber broadband business and digital initiatives such as advertising could push the market capitalisation of the conglomerate to $200 billion, the brokerage said.  "We think the market is giving little credit to these initiatives given limited visibility," BofA-ML said. "We expect near-term momentum to be strong."

For the quarter ended September, Reliance Industries reported a 18.3 per cent year-on-year (YoY) rise in consolidated net profit at Rs 11,262 crore for the second quarter ended September 30, 2019 compared to consolidated net profit of Rs 9,516 crore in the same quarter last year helped by strong performance across all business segments. As per Bloomberg consensus estimates, RIL was expected to post a 17 per cent jump in its consolidated net profit to Rs 11,158 crore for Q2FY20.

RIL's consolidated net revenue grew by 4.8 per cent to Rs 163,854 crore in July-September quarter of FY20, compared to Rs 1,56,291 crore in the corresponding quarter, driven by robust growth in retail and digital services businesses.

During the quarter under review, RIL's profit before tax (PBT) increased by 15.5 per cent to Rs 15,055 crore as against Rs 13,198 crore in quarter ended September 2018. The company's operating profit (EBITDA) rose by 7.1 per cent YoY to Rs 23,169 crore from Rs 21,641 crore in the corresponding period of the previous year, helped by strong operating performance in retail and digital services business. Other income jumped nearly 3-fold to Rs 3,614 crore in Q2FY20 against Rs 1,250 crore in Q2FY19.

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