The market capitalisation of Reliance Industries (RIL) on Monday crossed the R4 lakh-crore mark for the first time since May 2008. With a market capitalisation of R4.01 lakh crore, RIL is now the second-most valuable listed company in the country after Tata Consultancy Services (TCS), which commands a market cap of R4.90 lakh crore.The RIL stock has been on a roll after the company announced a tariff plan for data services which will be effective from April 1; analysts had not been anticipating the monetisation of its telecom offering so soon. The stock has gained nearly 15 % in the past four sessions, against the Sensex’s gain of 0.53%.
The share price of RIL on Monday rose 4.74% and the shares ended the session at R1,238.60 apiece.
A total of 2.04 crore shares were traded on the BSE and NSE on Monday, 5.2 times more than the stock’s three-month average of 39.13 lakh shares.
In a note to investors, Morgan Stanley said things are set to change for the Reliance stock, which has been underperforming for the past four years, as earnings start to flow in from energy projects and telecom monetisation gathers pace. “After nearly doubling its energy business investments in the past four years, we believe RIL’s energy earnings are poised to inflect over the next two years, benefiting from slowing oil oversupply, a rising global gas glut, and the start of a polyester upcycle. We think the ability to leverage these trends sets RIL apart from its global peers and drives our conviction that energy earnings can beat the consensus by 12-23%,” it said.
Regarding Reliance’s telecom business, it said though uncertainty has decreased with disclosure on tariff plans, it has not subsided completely. “We believe energy ROCE growth buffers the impact from lower telecom returns in the near term.” Of the 39 brokerages which track the stock, 29 have a ‘buy’ rating on it and the remaining 10 have a ‘hold’ rating.